Could You Benefit from a Cash Advance?
A cash advance is similar to a payday loan, but the terms should not be used interchangeably as there are multiple types of cash advances. The first type is the one you may be more familiar with as it involves requesting money from a short-term lender and repaying them once you receive your next paycheck. The second is a service many credit card companies offer where you can borrow money against the line attached to your card.
Usually the amount you qualify for in either scenario ranges depending on your income, the more you make per paycheck the more you can borrow or receive up front. With online borrowing services, once an agreement has been reached the company will deposit the agreed upon amount in your bank account. Short-term borrowing options are perfect for times when an unexpected expense comes up and you can not wait until your next payday in order to pay it off. Like most borrowing agreements you will end up paying back more than you borrowed and since they are for small amounts, they get paid back in full in one lump sum. Under the Truth and Lending Act, the cost of all short-term lending agreements must be made known to the debtor. Consider these options when you are in a bind and can not wait for your next payday and have exhausted all other alternatives.
Is the Service Safe?
Unsecured loans are not backed by an asset. An example of a service backed by an asset is a home mortgage because your house is equity for the service. A perfect example of an unsecured borrowing is a cash advance. There is no asset that you use as equity on the amount you receive, there is nothing to be repossessed if you do not pay the balance and a lot of times no credit checks are preformed before approving the applicant.
Short-term lenders are usually quick on approval so you can get cash faster. Their offerings are easier to qualify for if you are in good financial standing. If you have financial issues in the past you might have trouble finding a financial institution that would be willing to help and when you do the interest rates will usually be high. An unsecured counterpart, however, does not feature an extensive qualification process which makes them extremely easy to qualify for compared to the alternatives. These offerings are safe if the business and financial institutions issuing them are reputable business. They are a perfectly common occurrence in today's society and should not be viewed as an unsafe alternative to bouncing checks or over drafting on your bank account.
How Can I Qualify for This Option?
The beauty of short-term financial services is that just about everyone is more than capable of qualifying for one. If you've ever taken one out before, you know just how easy the process can be. It's so fast and user-friendly that more people are taking advantage of it than ever before! With the wide spread availability of online lenders, you can qualify for money upfront without even leaving your house and it takes just minutes to get started! Here's a look at the simple criteria that most providers require you meet in order to qualify:
- The first requirement that every applicant must meet is the age limit. Since lending money essentially requires a contract that promises that you will repay the provider, applicants must be at least 18 years of age.
- Another important requirement for anyone looking to qualify is that they must have a job or some type of steady source of income. Typically, you must earn about $1,000 a month to get approved, although it can vary between providers. The larger the sum you'd like to receive, the higher your income will need to be. In some cases, a provider may have to contact your employer or view one of your paystubs in order to verify that you truly work there.
- For those that are self employed or receive income from a different source, such as a monthly disability income from the government, you may still qualify for assistance. Often times, you can prove that you receive a monthly income through your bank statements or the checks you receive.
- Although it may not always be required, you will need to have a banking account to qualify with most providers, especially those that conduct their business online. Having a bank account can make the process much easier, as it allows your provider to simply direct deposit your funds into the account and then withdraw it on the due date.
- While it is not usually needed, you may need to have access to a fax machine in some cases. If a company cannot confirm your identity or employment, they may require that you fax certain documentation in order to get approved. However, with the advancement of online technology, this is rarely necessary.
- One of the greatest advantages of borrowing is that there is generally no extensive qualification process involved in the application stage. That means it doesn't matter if you already have significant debt or a poor credit score; you can still get approved for the money you need before your next paycheck.
- Finally, keep in mind that your state may have passed specific laws pertaining to unsecured borrowing. In some areas, there may be a more rigid approval process in place so take the effort to review the laws in your state before applying.
Will My Credit Come Into Play When Applying?
Not all borrowing options are the same and thus, not all of them will affect your credit - directly. Some services can affect it very directly, and it all depends on that lender's policies when issuing you the approved sum. Did the provider ask for your social security number? If they did, it can affect your report for non payment or non-timely payment very easily. Fewer lenders are bothering with social security numbers lately; however, finding that there are other, less invasive ways of enforcing repayment of the funds that are taken out by their customers. Certain types of borrowing agreements require you to write them a check for the approved amount with the first installment. This gives the provider access to your bank account and information which means they can do certain things to that account (like deposit the payment and bounce it), which will affect your report indirectly.
Even if you don't give your social security number, but just give some other identifying information like your address and drivers license number, lending companies can notify the authorities if you default on your agreement. Though this rarely happens, it is possible that these authorities can, in various ways, affect your report negatively as well. No matter which company you choose to go with, it's best to be prudent and plan very carefully to pay them back as soon as possible. Don't assume that because they don't have access to your social security card that if you default on your repayment they can't affect your credit one way or another. If you find yourself having trouble paying back a loan or two, consider other options that are available such as consolidating your debts into a single personal loan instead.
Alternatives to Consider
A question you might ask yourself would be, "Do I have any other options before I apply for a short-term lending service?" The answer is yes, and it is actually highly recommended to consider other possibilities before jumping straight to an unsecured lending service. Here is a list of the most common alternatives available to most consumers:
Save Your Future - Make A Budget!
Making a budget is the most viable alternative available to you. Cut bank on luxury items and unnecessary expenditures - yes, it really does make a difference!
They Have Options for People with Bad Credit, Too
If you are in need of money but don't know where to turn, look around carefully for compatible card offers and solicitations with low APR. This will help give you a little more flexibility in situations where you don't have the cash readily available but you don't mind paying interest.
Talk to Your Creditors - They Might Understand
Another quick and easy way to deal with your debt would be to ask those you owe money to for just a little more time. They might try to charge for that convenience, so a good question to ask also would be what added finance charge or higher interest rate would happen because of the extended bill.
Ask Your Employer for Help
You might want to consider an advance on your pay from your employer if that is an option, a small loan from either your financial institution or a lending company, or try borrowing money from your family and friends.
Take Cash Out Against an Existing Card
Cash advances on credit cards are also possible but the interest rate has a good chance of being higher than that of your other sources. You will likely want to find out the terms before you decide.
No matter what you do, the smartest decision you can make is to learn more about the lending process as well as your alternatives before you commit to a loan of any kind. As you can see there are a few alternatives, but just in case everything else fails you can rest assured that we will be here to help you if you choose to apply for the money you need before your next payday.