What is a cash advance

February 8th, 2016

What is a cash advance?

If you have ever applied for payday loan, you will easily understand the main point of cash advance loan. They are almost the same, more than that they are often considered as two names of one credit instrument. These short-term lending options are considered to be very popular with consumers because they are available at any time and almost without paperwork and tough requirements. The borrower gets some quite small cash amount for his current and usually emergency needs just in advance of his paycheck. Most lenders offer a short repayment period lasting about a month but some of them can step out and give 3 month loans. Regardless of the term a borrower is expected to pay a fee, the size of which still depends on duration of the set repayment period. The amount of loan available depends on a borrower’s income and legislation limitations being in force in the state. Typically it makes from $100 to $1 000. The interest rates are very high here.

What is the difference?

Payday loan Las Vegas are quick and easy to get. They are especially convenient for those who do not have credit cards or when the limits on a credit card are not enough. Lenders usually require showing personal identification and proof of income in the form of a bank statement for several months or other document. The applications can take about half an hour and can be arranged even online. It is important that a borrower is not expected to secure the loan.
     When we speak of cash advances it means that a loan is mostly offered through credit card issuers. It is not the only way but usual one. So for this type of lending a borrower is expected to have a credit card, using which he buys cash at the quite high price.

Types of cash advances

One type of cash advance loan is payday loan as such. It is structured the same way and should be repaid on the next payday of a borrower that is why its repayment term is about a month. It is unsecured also.
     The other type makes the above described difference. It is based on a credit card and its repayment terms depend on the policies of the bank in respect of the particular kind of credit card. Here a borrower should compare the conditions of these two lending instruments because it is impossible to say for sure, which one is more beneficial in any single case. It is clear that unsecured loans are more expensive because of the risks of lenders, for bad credit should be indemnified against. While cash advances are more predictable and can cost less. But it is true that the lenders offering cash advance equated with payday loans can develop different programs for their regular customers repaying all their loans in due time and grant more favorable conditions including lower interest rates.

When getting cash is costly?

It can turn out that cash advance loan occurs to be the costliest way to receive the needed cash due to a range of various fees and expenses, which are not included in fees of payday loan. The first one is cash advance fee equal to 2%-5% of the loan amount, which is paid even before the moment when a borrower gets the money. There is no way to avoid it. And of course a borrower will pay interest that is usually high as we have already mentioned and it is accrued just on the day the loan is taken out without any grace period. To the contrast there is a grace period with a credit card and that means a borrower can use the cash without any interest during about a month. So if a borrower wants to save, he should repay a cash advance as soon as possible.

Pros and coss

Summing up we should honestly and shortly outline the advantages and disadvantages of this lending option.
Pros
• When you apply for cash advance loan you get the advance money quickly – just as soon as you sign the contract.
• You are not restricted as to the purposes. You can spend money as you prefer.
• You can hardly be refused because of bad credit history though you can get worse conditions. Most lenders don’t check this information but ask for proves of your ability to repay the debt.
Cos
• Extremely high fees can be appropriate only in case of emergency. So you are not recommended to use this loan on a regular basis. Do not cover your day-to-day expenses by any kind of short-term loans. You should revise your approach to the personal finances, make plan for a month and compare it with the actual figures in order to do without credit money.
     But if you need cash quickly and you are sure to have your funds, dip into the cash advance loan. In our network you will find a lot of lenders, all of them deserve your attention. Just look them through, study their conditions beforehand and chose several ones just in case because you will have no enough time to analyze all the parameters of loans when you are expected to pay for urgent things.