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A cash advance is a short-term loan for people who need money quickly. Read on to answer your cash advance questions, including, “are there options for cash advance loans near me?”
What Is a Cash Advance?
A cash advance is an easy way to quickly get your hands on money in an emergency or for other needs. They come in forms like payday loans, credit card cash advances, or merchant cash advances. Though cash advances are simple in terms of receiving money, they might be more challenging to pay back because of high interest rates, fees, and short repayment periods.
Types of Cash Advances
Here are some of the most common options for cash advances.
A payday loan, also known as a paycheck advance or deferred deposit transaction, is considered an advance on your next paycheck. This type of loan typically requires you to pay back the lump sum within 14 days.
If you’re approved, you supply the lender with a post-dated check for the full loan amount, plus the cost of fees. Alternatively, you can authorize a debit transaction from your bank account or credit union. On the due date, the lender deposits your check or processes the bank transaction.
You can roll over your loan in some states if you don’t have the money by the assigned day. There is usually a limit on the number of times you can do this, and any rollover will be subject to extra fees and interest.
Credit Card Cash Advances
A credit card cash advance is essentially a short-term loan issued by your credit card company that borrows against your line of credit. Like a regular bank account, you can request the advance in person or at an ATM. The biggest difference is that it comes from your credit limit instead of your bank account.
A credit card cash advance usually has a much higher APR than regular credit card transactions. No grace period means that the interest rate starts as soon as you borrow the money. Your card issuer usually charges a cash advance fee as well.
Merchant Cash Advances
This type of cash advance is typically reserved for small business owners. A merchant cash advance is similar to a credit card cash advance or a payday loan in that the business owner receives immediate payment. But instead of repaying in a lump sum, the business owner promises a portion of future sales from the business.
While this type of loan can help small businesses grow, it still comes with the higher cost of a cash advance and can affect your business’s financial health if you are unable to repay.
Why Are Cash Advances Expensive?
A cash advance is one of the most expensive forms of borrowing. For starters, cash advances come with a fee. Depending on what kind of cash advance you choose, you’ll be paying either a flat rate or a percentage of your advance amount. Payday loan providers tend to charge sizable fees, and credit cards have a separate cash advance fee as well.
On top of that, you’re subject to a higher interest rate. Credit cards typically have a separate, higher APR for cash advances. Payday loans can have an APR that’s as high as 500% or more. Cash advances have no grace period, so this interest kicks in right away. While most states have their own laws around payday cash advance loans, costs remain similar across the country.
Where Can I Get a Cash Advance Near Me?
There are several ways to get a cash advance, depending on what type of loan you choose. If you decide to get a credit card cash advance, you can do that at your bank or credit union, at an ATM, or even online if your credit card provider offers that option.
If you choose a payday loan, make sure you do your research and vet lenders. You want to check the lender is licensed to operate in your state and meets state regulations. Lenders should also clearly list terms and conditions, including fees and interest rates. Doing this research helps weed out potential scam companies.
Payday loans are available from brick-and-mortar locations, but you can also find them with online lenders like Payday Depot.
How Can I Get A Cash Advance Near Me?
There are a few simple steps to getting a cash advance. First, choose which type of cash advance works best for you. Decide between a credit card cash advance or payday loan, and whether you want to complete your application online or in person. Also consider what terms and fees work best for your needs.
From there, you fill out your application. This is usually a quick and easy process. To make it even faster, make sure you have the necessary information on hand, such as your banking information.
Lenders typically make decisions quickly, as fast as instantly for online applications. Once approved, you’ll sign an agreement. Again, you can do this in person or by e-signing with an online lender.
Finally, you can receive your money. Cash advances work quickly, so there’s almost no waiting for your money. Most companies get your loan to you either the same or next business day.
Cash Advance Requirements
Each type of cash advance and lender has its own requirements, but if you’re looking for a payday loan, here’s what you can expect to need:
Age: For the most part, you need to be 18 years or older to apply for a cash advance.
Identification: Most lenders will ask for a Social Security Number or Individual Taxpayer Identification Number and a valid state- or government-issued I.D.
Income: You will have to prove steady income, whether from a job or another source.
Personal Details: Your lender will ask for basic information like your name, address, and banking information. Some lenders may also run a credit check.
The Pros and Cons of a Cash Advance
Here are some of the benefits and drawbacks to cash advances to help decide if they’re right for you.
- Quick money source in a financial emergency.
- Receipt of money is quick, so waiting periods are minimal.
- Are easy to apply for.
- Is an unsecured loan, so you don’t need to provide any collateral.
- Come at a high cost due to fees and interest rates.
- Risk extra costs like overdrafts or overcharges if the loan is connected to your bank account or credit card, and you’re unable to repay the loan on time.
- People who are already financially struggling may renew or default on their loan, creating a cycle of debt that is hard to get out of.
Is a Cash Advance Right for You?
Cash advances like payday loans offer fast access to money you need but don’t currently have, and often with minimal requirements and from the comfort of your home. It’s a reasonable option to consider if you only need to borrow a relatively small sum and are sure you can repay it when first due.
If you’re already struggling financially, the high interest rates and short lending periods on payday loans can make them harder to repay. Consider other alternatives like borrowing from friends, using a credit card, or taking Payday Alternative Loans (PALs) from a credit union.