Cash Advance

Cash advance loans are provided to borrowers with short term repayment terms. They are usually available in amounts ranging from $100 to $1,500 but this varies depending on the lender and borrower’s financial situation. This type of loan typically features a high interest rate as there is no collateral or co-signer required for the loan. This financing is available through many banks and credit unions but is also popular with private lenders. There are many cash advance lenders or payday loan providers which are established for providing this type of financing in particular. A major example of this is the huge Money Mart franchise which provides numerous types of short term loans to their lenders, as well as some other services.

How Cash Advance Loans Work
A cash advance loan is used as an advance on funds that are scheduled to come in the near future. Cash advance loans are most commonly used as cash advances for paychecks. Banks even offer cash advances to some bank account holders with a solid employment history if their paychecks are put into the bank account with that particular bank. There are other types of scheduled funding that may be used as proof of ability to pay the cash advance loan but the payday loan is the most common method for this type of financing.

Cash advance loans typically have repayment terms of a month or less. This is not a long term loan at all. It features a shorter term than most short term loans. It may be possible to pay the interest or a certain fee on the cash advance loan to extend the payment term slightly but this will be costly. Generally, you will be required to pay the cash advance loan off when you receive your next paycheck. Some cash advance loans may even require payment within only a week of them being obtained.

How to Qualify for a Cash Advance Loan
Cash advance loans do not have significant requirements for approval. It may be as simple as showing some ID and pay stubs to be approved for financing. Basically, you have to provide proof of income and employment and show some identification. If you choose to apply for a cash advance loan online then other information may be needed such as your banking details to deposit the funds to your bank account. Even with some local cash advance loan providers, a checking account may be required. You may also have to sign a document which gives the lender permission to automatically take out the loan repayment and any finance fees from your checking account.

What to Consider About Cash Advance Loans
The main thing to consider if you want to determine whether to apply for a cash advance loan is if the cost of them is really worth it. If you have any debt that must be paid by a certain date (maybe to avoid defaulting) then the cash advance loan may be useful. For emergency medical expenses which you do not have coverage for it may also be worthwhile. However, the cash advance loan should not be used for unnecessary purchases and expenses like many credit cards are. To give you an idea on how costly a cash advance loan may be, if it takes two months to pay a $750 loan, it could have more than doubled with finance charges.

The high cost of cash advance loans makes it a terrible idea, especially for those that are in a poor financial situation already. With that being said, it is only a good idea to consider a cash advance loan if it is absolutely necessary. You should look into other methods of financing beforehand. There may be other ways to receive the funds you need with lower interest rates, fees, and better repayment terms. The cash advance loan should be seen as a last resort. It is definitely good to have the ability to receive funds immediately if needed. However, the high cost and inconvenient repayment terms of the cash advance loan makes it a type of financing that you should only use if completely necessary and if there are no better options.