Overview
A cash advance is a powerful financial tool when money is needed before the next paycheck arrives. This type of loan is easy to apply for online. Every step of the process is handled online without any telephone calls or faxes. The loan application for a cash advance is easy to read and understand. All the information is typed into the webpage and transmitted for approval. One major advantage to the cash advance process is the rapid approval process. After the loan is approved, the funds are transferred electronically to the checking account for use by the loan applicant.
Another advantage to the cash advance is the availability to people who have less than perfect credit. When the unexpected happens and money is needed fast, people with a poor credit history or no credit can qualify for a cash advance by filling out the online forms. No explanation for how the funds will be used is needed for approval. When the funds are received, the loan recipient can use the money any way they wish. Then the entire loan is paid back when the next paycheck arrives.
Timely repayment of the cash advance can be a positive credit entry for those who wish to repair a poor credit history or establish a credit record. If the money is not available to repay the entire loan from the next paycheck, the borrower can apply for an extension. Remaining in good standing for the entire term of the loan develops positive credit habits that are reflected on the credit history.
Some of the most frequently asked questions include:
What is a Cash Advance?
The Cash Advance is a very small loan with a term of less than one month. Most cash advances range from $100 to $1500 and can be used in many ways for unexpected expenses, which might include: emergency car or home repairs, unexpected bills, medical expenses, or jail bonds. The reason for the loan is not reported to the loan agency and there are no requirements to explain the exact reason for the need. Repayment is the only requirement, and that must be accomplished when the next paycheck arrives. Another term for a cash advance is a payday loan.
How does a Cash Advance work?
The loan applicant uses an online webpage to provide the necessary personal and financial information to fill out the application. All information must be accurate and complete for the loan application to be accepted for evaluation. Application information is sent to a direct lender or financial institution that will make the final approval determination. When the approval terms are met by the borrower, the lender will approve the loan, usually within 24 hours. After the loan is approved, the lender will transfer the money electronically into the borrower’s checking account.
How much money can I borrow?
Financial regulations vary from state to state, but most cash advances must fall between $100 and $1500. Each lender has specific guidelines for determining the exact loan amount including the stability of your employment and your monthly income.
What are the qualification criteria?
Most lenders require that the applicant:
1. Is at least 18 years old.
2. Has a checking account in good standing.
3. Earns a monthly income of at least $800.
4. Uses the direct deposit option for every paycheck.
Even if you have been through a bankruptcy proceeding and have charge-offs on your credit history, you can still qualify for a cash advance. Some lenders will charge a higher interest rate for major credit problems reported on the loan application.
What kinds of fees and interest rates are charged for a cash advance?
All the information provided on the application is taken into consideration by the lender, and then an interest rate is set for the term of the loan. Most online applications are free of charge and the only actual cost of the loan is the interest that must be paid when the funds are transferred. Remember to apply for enough money to cover the interest amount above the dollar amount required to pay the unexpected expense. Carefully read the terms of the loan and do not sign a loan that does not have terms and fees that can be repaid.
How do I send additional information to the lender?
Most lenders will use the information provided in the loan application without any additional requests for faxes of other documents. Since the term of the loan is short and amount is small, lenders follow a simple process. If any information on the loan application cannot be verified during the approval process, the lender may request additional documents that must be faxed in a timely manner or the application is dismissed without consideration.
How is the loan repaid to the lender?
On the application, the date for full repayment is clearly stated. When that date arrives, the entire cash advance amount is drawn from the checking account. If the entire amount is not present in the checking account, the loan goes into default. Carefully read the loan application to understand the penalty for defaulting on the cash advance.
Can I have multiple cash advances at the same time?
While most lenders will approve an additional cash advance for most borrowers, this practice is not recommended. Cash advances are meant to fill an immediate need and not to address cash flow shortages over an extended period of time. Multiple loans can lead to multiple defaults since the loan terms could overlap. Avoid the practice of seeking multiple cash advances.