A cash advance is a short-term loan that can be used to pay for an unexpected expense that came up before your next paycheck. A cash advance, also known as a payday loan, can help you out of a jam by using your next paycheck as a guarantee that you will pay back the loan. With a cash advance, you can get the money you need quickly. But before you take out this kind of loan, you should know exactly what it is, what the terms are, and what the risks are.
A cash advance is a short-term loan that is usually for less than $500 and is not secured. A cash advance is a quick way to get a small amount of cash because it doesn't require the paperwork and approval process that longer-term bank loans do. Most of the time, you can do this at a small place that cashes checks or at a pawnshop. And quick cash advances are being offered by more and more online lenders these days. The borrower says that he or she will pay back the loan with the next paycheck. When the borrower gives the lender either a check or a debit authorization for the amount borrowed plus the interest, the loan is made. The lender agrees to keep the check or authorization until the next time the borrower gets paid. When the borrower's pay day comes, the lender can cash the check, or the borrower can get the check back by paying back the full amount of the loan plus the interest. It seems simple and not important, but there are some things to keep in mind.
If you're thinking about getting a quick cash advance loan, you probably don't have much money and don't have many other options. Know what you will be doing. The most important thing to know is the finance charge, which is added to the loan when it is taken out. This fee could reach $50. So, if the reason you want the cash advance is less important than the fee, you might want to think twice about it. And if you can't pay back the loan right away, you should know that the interest you are charged keeps adding up, making the amount you have to pay back bigger (there is no refund of applied interest if the loan is repaid early). If this isn't a problem for you and you can pay back the loan as soon as you get paid, a quick cash advance might be the answer for you.
There are times when you shouldn't get a quick cash advance loan. Don't take out a loan against your next paycheck to buy things on a whim or just to have some cash on hand. This kind of loan can get very expensive very quickly, especially if it isn't paid back on time. You'll be in a worse financial situation than before. Because of this, you should only use this kind of service in serious or urgent financial situations. Unfortunately, some people who get quick cash advances do it over and over again and often do it to get their credit extended. This is possible if you only pay the lender the interest and keep giving them new checks or debit authorizations. Many borrowers don't have a short-term financial problem; instead, they have ongoing financial problems that they try to fix with a quick cash advance loan. This isn't smart.
A quick cash advance loan is only a quick fix for a financial problem that won't last long. If you have a bill due and don't want to risk hurting your credit score, if you need to pay an emergency medical bill, or if you might bounce a check, a cash advance might work for you. If you know how much interest you'll have to pay on top of the loan amount and can pay it back right away, this type of loan can be a good one-time fix for a tight financial situation.
