Cash advance services are provided by banks, credit companies, loan companies and your workplace. When you qualify for a cash advance, the money is deposited straight to your bank account where you can access the funds and use them. Unlike loans, there are minimal requirements to meet when applying for a cash advance loan.
Here are some pros of cash advance
Fast funding
A cash advance is a convenient and rather easy way to get some money. When you have a reliable job, you can easily get a cash advance from a trusted lender. Getting a cash advance is one of the fastest forms of financing. Conventional banks credit companies and other financial organisations usually take up long amounts of time to review the application made and to check on eligibility. If you qualify, getting the loan into your account may take up to two weeks. The application process is easy and you won’t need to submit too much personal information. You can apply online and get it approved within a day or two. Accessing the funds is either through direct withdrawals or ATM.
You can qualify with a bad credit
You can receive a cash advance even if you have a bad credit score since lenders do not follow up on these scores. You can have other loans or a poor history and still receive this type of loan. This means you can use your cash advance to pay back your due loans.
You do not have to put up any collateral
Most conventional loan lenders require you to put down some collateral in order to qualify for a loan. It can be your mortgage, logbook or precious items. If you fail to pay back the loan, the lenders will sell your assets to get back their money. For a cash advance, lenders do not need any form of collateral. This means it is very easy to get a cash advance even when you do not have some assets in your home
The cons of a cash advance
It is one of the most expensive forms of loan financing
The convenience of a cash advance comes with an expensive price. The interest rates and fees of the loan are very high compared to other conventional loans. The rates lie between 16% and 24% of the cash advance you receive depending on the terms of the lender. For some lenders, the interest rates will accumulate almost immediately and continue to grow if you do not make the payments on time.
A cash advance is only a temporary solution
A cash advance is good for an emergency situation and not long term financial crises. When you use a cash advance to repay a loan of taking care of a situation, you will have to pay it back eventually. It can create a huge risk of the debt cycle.
Final word
Different lenders have varying terms and conditions; ensure you check them out before applying for a cash advance loan. Cash advances are more like short term loans but have very different interest rates.