Robert Henderson
Last updated: 1/2019
If you’re living in the United States, you’ve probably obtained a loan at some stage in your life. Lenders try and make the process sound easy, but it can actually be more complicated than you think. If you don’t know how to approach the subject, you can end up wasting valuable time and money.
Background
Cash advance loans are part of a budding industry that provides quick cash to consumers. They’re able to bypass a lot of the red tape that traditional lenders use to slow down the lending process.
But they come with their own risks, that’s why it’s important that you’re fully aware of cash advance loans and how they operate. If you’ve ever wondered about cash advance loans and the types of features that are included with them, this article will be a great resource for you. We’ve compiled everything you need to know about cash advance loans and how they might be able to help you. In addition, we provide some alternatives that you may find appealing.
Make sure that you carefully consider all the content provided in this guide. You don’t want to get in a situation where you are caught off guard – it’s important to be as aware of a borrower as you possibly can be.
What is a Cash Advance Loan?
A cash advance loan is simply a loan that provides you with an advance of cash. These types of loans typically come in the form of payday loans. Payday loans are loans that are tied to the value of your next paycheck. Payday lenders will give you money with the understanding that you pay back the loan when you receive your paycheck. You typically pay a large fee for this service. If you don’t pay back the loan in entirety, you will begin to accrue interest on the debt. For this reason, it’s very important that you use cash advance loans when you know you can pay back the loan on the first payment date.
The good thing about cash advance loans is that they are typically unsecured, which means you don’t have to put your family’s financial security at risk when you obtain one of these loans. In addition, you don’t have to get a credit check. Cash advance lenders will typically provide you with money as long as you can prove that you have an upcoming paycheck that equals the value of the loan and fee. Lastly, most cash advance lenders can get you money as soon as you apply for their financing. They have online and physical locations that provide quick services.
Be Careful
Many people operating in the cash advance loan industry are considered predatory lenders. Predatory lenders are lenders that provide people with cash at extremely extortionate rates. They often don’t clearly advertise the rates that they are providing to people, this is done in order to provide people with as little information as possible. Predatory lenders like to paint a picture of financial freedom, when they’re truly luring people into possible debt traps.
It’s important that you avoid lenders like this. You want to make sure that the cash advance lender you are using isn’t one that is overly predatory. There are a few ways that you can try and prevent this from happening. Make sure to check the following things before you enter into any financial agreements with a cash advance loans company.
Check Interest Rates
This is the first thing that you should do. You need to make sure that the interest rates you’re looking at aren’t too high. Make sure that you get to view the full interest rate that you will be charged on an annual basis. The last thing you want to do is end up with an extremely extortionate rate – this is the easiest way to get into a debt trap.
Many cash advance loan companies may charge you up to 1,200% interest. This is an astonishing rate when you compare it to the rates that many traditional lenders will charge you. Make sure that you’re not exposed to such a ridiculous rate.
Check Fees
Another way that many cash advance lenders make money is through charging you a large amount of fees. You need to make sure that you’re fully aware of any fees that you might be responsible for paying. You don’t want to end up finding out that you’re responsible for paying much more than you originally thought. Hidden fees are a real problem in this industry, so make sure you discuss all your responsibilities with the lender.
The best way to do this is to ask them for an official breakdown of the entire cost of the loan. This will allow you to see the true value of the loan you are getting, it will also allow you to do effective comparisons with other lenders. Remember, interest rates aren’t the only way that you end up having to pay extra money to lenders.
Check with Consumer Watchdog Groups
Lastly, you should always make sure to check with past customers to see how they enjoyed the services of the lender that you are thinking of working with. Again, you should never work with a company that has a track record that indicates they are shady with their customers. There are plenty of bad lenders in this industry, you need to be certain that you are working with one that is ethical.
Both Consumer Affairs and the Better Business Bureau provide consumers with information on the operations of a company. You can find any lender or business in the United States on these web pages. Past customers are allowed to post complaints and testimonials about the lender – and these consumer watchdog groups even do their own research to determine if a lender is worth working with.
Advantages of Cash Advance Loans
After reading through all the information in this guide, you’re probably still trying to decide if cash advance loans are right for you. We’ve compiled a list of all the benefits of this form of finance, make sure to check it out before you make any decisions.
- Instant – If you can prove that you have an upcoming paycheck, you can be instantly approved for money and receive cash the same day. For this reason, it’s great for those who need cash extremely quickly.
- Cash in Hand – Unlike a credit card, cash advances provide you with cash so you don’t have to worry about paying any cash related expenses.
- No Credit Check – One of the biggest benefits of this form of finance is that you don’t have to get a credit check. This means that you won’t damage your credit by applying, and you won’t be denied because of a poor credit history.
Disadvantages of Cash Advance Loans
While there are advantages to getting cash advance loans, there are also some disadvantages. It’s important to consider both the benefits and drawbacks when you’re making any financial decisions. Below we analyze what the disadvantages of this form of finance are:
- High Interest – The primary disadvantage of cash advance loans is the high interest you will have to pay if you end up missing the first payment. You don’t want to be in a situation where you are accumulating debt at an extremely fast pace.
- High Fees – Another problem with cash advance loans is the fees associated with the loans. There are often very high fixed fees associated with these types of loans.
- Bad Lenders – There are many cash advance lenders that are considered predatory. They don’t have the best interest of their clients in mind – you have to be especially careful about who you work with.
Alternatives to Cash Advance Loans
If you need money but you’re worried that you won’t be able to pay back your cash advance loan in time to prevent large amounts of interest from accruing, you may want to consider alternative forms of finance. You don’t want to end up with a large amount of debt because you were unable to pay back a loan on time. It’s very important that you know whether or not you are capable of paying back a cash advance loan.
Fortunately, there are a few other options that you can look at if you want to make sure that you don’t get cheated out of your hard-earned money. We’ve compiled a list of alternatives that you may want to consider if you are worried a cash advance loan is wrong for you.
Online Personal Loans
Online personal loans are part of another booming personal finance industry in the United States. Many online lenders can provide you with cash within 24 hours of approval, meaning that you will be able to get money extremely quickly. You can also fill in an online application in about ten minutes.
The major downside to this is that you will have to get your credit checked. This means that if you do end up being rejected, your credit score will decrease. In addition, if you have a bad credit score, you won’t be approved in the first place.
Peer to Peer Lending
Peer to peer lending is another platform that you can use to get small amounts of cash in a hurry. Peer to peer lending allows consumers to lend to other consumers. It’s the perfect way to obtain finance without using traditional lenders. There are various platforms that facilitate this type of lending online. The online platform will take a small commission for their services.
This is a good option for those who want to get small amounts of money. You won’t find large unsecured loans on peer to peer lending platforms, as it is too risky. Fortunately, you’ll be able to get financing without a credit check. Many peer-to-peer lending platforms do provide loans without credit checks or with soft credit checks. The interest rates associated with this form of finance do tend to be much lower than those of cash advance loans. For this reason, this has emerged as a popular alternative for those who know they will not be able to pay back their loan by the first payment date.
You do need to be wary of fees though – always check you’re not overpaying.
Soft Credit Check Personal Loans
Soft credit check personal loans are a good option for those who don’t want to damage their credit report when they apply for financing. If you’re looking into cash advance loans because you want to prevent inquiries on your credit report, this is another good option. Hard credit checks are the type of checks that lenders typically use – they’re the most in-depth check available. But they also record an inquiry on your report, which damages your score.
Soft credit checks do a surface level check, but they don’t record an inquiry on your report. This is a great way to ensure that a rejection doesn’t unnecessarily damage your report!
Verdict
After reading this guide, you should have a pretty solid understanding of cash advance loans and how they might be able to help you out. They’re meant to be short bursts of cash in emergencies – they shouldn’t be used regularly. You need to make sure that you understand the consequences of not paying these loans back on time. There are also a few other alternatives you can use that provide similar features. You should always consider all your options before making any financial decisions.
Choosing the right lender can be the hardest part of the process. That’s why you should always make sure to do as much research as possible. If you head to our homepage, you’ll find a variety of lenders that we recommend using. We recommend these lenders because we want our readers to have a head start on finding the right lender to work with.
If you have any more questions about personal finance, make sure to check out some of the other resources on our site. We make considerable effort to provide our readers with as much informative content as possible.
FAQ
Cash Advance Loans Basics
Are you new to cash advances? This section is filled with questions commonly asked to those who are looking for information on cash advances.
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What is a cash advance?
Cash advance is a type of short-term loan. Since it is for a short-term loan, it is considered an expensive loan to take out. It is usually taken out against your credit card’s credit line (with a set amount limit per account). It is like a withdrawal from your bank account, except that you need to pay it back.
How does cash advance work?
Cash advance is a service available through most credit card companies and card issuers. Cardholders are given access to a certain amount of cash that they can withdraw for any purposes they seem fit. However, there are associated cash advance fees and higher interest rates.
How to do a cash advance?
You need to activate your credit card first in order to access the PIN needed to withdraw from an ATM. Once the PIN is activated, you may use your credit card like a regular ATM card.
Is cash advance a scam?
No. It is a legitimate product offered by credit card companies and card issuers to benefit their cardholders who are in need of immediate cash.
Do cash advances show on credit report?
No. It won’t be reflected on your credit report so it has not direct impact on credit score. Unpaid cash advances, on the other hand, will show up on your credit report.
What is a bank cash advance?
A bank cash advance is a type of short-term loan that you take out using your debit card. If you wish to make a cash advance, you have to pay for associated fees (typically a percentage of the amount withdrawn).
Is cash advance part of credit limit?
No. There is a separate line of credit provided as cash advance. It is different from your credit card limit.
How much is a cash advance fee?
It varies from one credit card company or bank to another. However, the standard seems to be anywhere from $5-$10 or 3% of the amount withdrawn.
Will a cash advance hurt my credit?
No, unless you are unable to pay your cash advance on time. A cash advance itself is not listed on your credit report.
How many cash advances can you have?
There is no limit to how many cash advances you have, as long as the total amount is within the specified cash advance limit for your account.
What does cash advance rate mean?
The cash advance rate refers to the fee that you will have to pay the bank or credit card company every time you take out cash from your line of credit. This is usually of a higher interest rate.
How much does a cash advance cost?
There is often a flat fee for your cash advances. But some banks will charge a certain percentage of the withdrawn amount. The higher your cash advance, the higher the fee.
Can I balance transfer a cash advance?
Yes, you can balance transfer a cash advance to another credit card. The only downside for doing this is that you will still have to pay the cash advance fee (around 3-5%) even if you pay off your balance in the other credit card.
How to do a cash advance at an ATM?
The process of taking cash advance at an ATM works the same way as it would when you withdraw from an ATM card. You also need to set up a PIN to activate your cash advance line of credit.
What is a cash advance apex?
Apex is one of many online lenders that offers cash advance loans to its consumers.
What is cash advance interest?
This is the interest rate that you must pay in order to obtain cash for emergency purposes. This is higher in terms of interest rate compared to credit card purchases.
What is a cash advance convenience check?
Convenience check is a type of blank check issued by credit card companies to cardholders. This check can be used to pay off any balance on your other credit cards or to obtain cash advance.
How does APR work on cash advance?
The APR (annual percentage rate) for cash advance is typically higher than your standard credit card purchases. Even when some credit card companies have a special introductory rate, this rate won’t apply with cash advances.
Qualifying for Cash Advance Loans
How do you qualify for a cash advance? What do you need to comply with to get cash advance? In this section, you will learn whatever you need to know to obtain cash advance loan.
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How to get a cash advance?
Getting cash advance is as simple as withdrawing money from your ATM account. The only difference is that the money you take out is from your credit card. Thus, you need to pay it back and it will come with a steep interest rate.
Where can I get a cash advance?
If you own a credit card, you can ask your credit card issuer if they offer cash advance credit line. More often than not, you will be approved once you are a cardholder (especially if you have good paying history).
Where to get cash advance?
Credit card companies and other card issuers offer cash advance to their cardholders. If you are interested, you can inquire your credit card provider about it.
How to get cash advance from Discover?
As with any banks or credit cards, you must first enroll your Discover credit card to qualify for cash advances. Once you are enrolled and have a pin registered, you can withdraw cash (within the specified limit) from an ATM.
Where to get a cash advance near me?
If you are looking for cash advance loans in your area, you can do an online search or you can check around with banks in your local area. Most credit and financial institutions nowadays offer this type of product.
Can you get a cash advance from bill me later?
Yes. You can get cash advance via the send money feature on Paypal, provided that your Bill Me Later account is linked to your Paypal account.
Where to get cash advance on Mastercard?
If you want to use the cash advance on Mastercard, it is available through the following banks: HSBC, Citibank, and more.
How to get a cash advance from Paypal credit?
If you want to get cash advance via Paypal, you need to set up a business account. You must make an invoice to yourself using your business account and pay that invoice using Paypal credit. There will be some transaction fees but helpful if you are in a pinch.
Can you get a cash advance without a bank account?
While bank account isn’t stipulated as a requirement for cash advance, you will need one in order to access your cash advance.
What do I need to get a cash advance?
Some of the basic qualifications for a cash advance would be a bank account (so you can access the funds), proof of income, and personal identification (photo IDs).
Cash Advance Loans Specifics
Cash advance works differently than other types of loans. Make sure you are informed about the interest rates, processes, and other aspects of getting cash advance from your bank or credit card.
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What is cash advance fee?
If you are in need of emergency fund and you have no savings, cash advance is the best solution if you want easy access to funds you need. You can conveniently withdraw cash from your credit card to be used for any purpose necessary. For this convenience, the credit card issuer will charge a fee, known as cash advance fee.
What is cash advance credit line?
Cash advance credit line is a specific amount of money that you can gain access to once you are approved for cash advance by your credit card company.
What is cash advance APR?
APR is annual percentage rate, which can vary from one credit card to another. This is the amount you have to pay your card issuer whenever you access cash from your cash advance credit line.
What is cash advance limit?
When you are given access to a cash advance credit line, there is a limit set by the card issuer. This limit means that you cannot exceed the specified amount in terms of how much you can withdraw.
Does Green Dot offer cash advance?
Yes. This type of short term loan is available for credit card holders of Green Dot cards.
How to get cash advance from Capital One?
To get cash advance from Capital One, you must request for a pin by going to your online account or calling customer service. Once you have your pin, you can use your credit card to withdraw cash (within the specified limit).
How to get Walmart cash advance?
You can get up to $100 in cash advance on Walmart’s “Discover Card” while the store card version can offer up to $60 in cash advance. Go to their checkout corner to claim your cash advance using your credit card.
How does American Express cash advance work?
To qualify for the American Express cash advance, you must sign up for the Express Cash or Cash Advance program. You can use your credit card to withdraw cash in participating ATMs. There will be a fee of $5 or 3% for each transaction – whichever is higher.
What do you need for a cash advance at Amscot?
If you want to take out cash advance at Amscot, you need to provide the following requirements: proof of income, government-issued ID, and checkbook (or bank statement).
What is the cash advance fee for Capital One?
The cash advance fee for Capital One is $10 or 3% of the withdrawn amount (whichever is higher).
What banks do cash advance on American Express?
There are several banks that use and offer cash advance through American Express. Some of them include Bank of America, Barclays, and CitiBank.
How much is a cash advance fee at Wells Fargo?
At Wells Fargo, the cash advance fee is either $10 or 5% of your cash advance.
What is the best online cash advance website?
Each company has their own unique fees and policies for cash advances. It is best to check and compare these rates to find what is best for your financial needs.
Can cash advance company garnish wages?
No. The only time a cash advance company (or any lender for that matter) can garnish your wages is if they have a court order.
Is Cash Advance USA legit?
No. The Department of Financial Institutions has published on its website that Cash Advance USA is an entity that operates as an advance fee scam. They also do not have a license with the department.
How much of a cash advance can I get?
The cash advance limit is generally expressed as a certain percentage of your credit limit. Thus, you can expect for this limit to change over time.
How to get out of cash advance loans?
If you want to get out of cash advance loans, you must stop using your account for accessing cash advance (and avoid growing your debt). You must then consistently pay off your cash advance loan so you can also keep it from incurring more interest over time.
How to get a cash advance without a pin?
If you do not have a PIN, you can contact your credit card company about which bank they are affiliated with. You can process your cash advance so that you can take out the funds over-the-counter instead of via an ATM.
What is Cash Advance USA?
Cash Advance USA is a company that offers cash advances to borrowers in the US. However, it has been recently cited as a non-licensed company by the DFI and is therefore a scam.
How much does American Express charge for cash advance?
The standard fee for American Express cash advances is $5 or 3% per transaction amount.
What is interest charge on cash advances?
This rate will vary from one credit card issuer to another. The standard rate is anywhere from a flat rate of $5 to $10 per transaction, or 3-5% for the withdrawn amount.
Is First Cash Advance legit?
First Cash Advance is not accredited by the BBB (Better Business Bureau). Take caution when dealing with companies without proper accreditation.
Robert is our in-house expert on personal loans and finance. He got an MBA, specializing in Finance, before joining the workforce. After working for multiple Fortune 500 companies in the past decade, he brings a wealth of knowledge and experience to the table.
