Wouldn’t it be nice if our lives always organized themselves around our pay days? Unfortunately, things rarely work out that way. A sudden medical emergency or unexpected car trouble can create an unforeseen expense that you don’t have the ability to pay for until your next pay check. If you have poor credit or no credit history, or if you’ve had to file for bankruptcy in the last several years, you may not have many options when it comes to lines of credit to help you pay for those unforeseen expenses that come up from time to time. That’s because most lines of credit require you to have at least a decent credit report. Fortunately, there is an option for borrowers who don’t have great credit. You may be able to qualify for a cash advance. All you need is a steady income and a bank account where you can receive the advance and eventually repay it. Poor credit scores and no credit history doesn’t disqualify you.
What is a cash advance?
A cash advance is when a lender loans a relatively small amount of money, usually between $100 to $1,000 with the expectation that it will be repaid on the day the borrower receives his/her next paycheck. The lender is, essentially advancing them the cash from their upcoming paycheck. Because the loan amount is small, the lending period is short term, and good credit is not required, the interest rate and/or on a cash advance is quite high.
How it works
One of the nice things about a cash advance is that approval is very quick and you can have access to the needed funds usually within a day. To obtain a cash advance, you can apply online in just a few minutes by filling in the requested information. Once you are approved, the money will soon be deposited into your bank account so that you can use it to take care of your expenses. On the day you receive your next paycheck from work, you are expected to repay the total amount borrowed plus the lending fee of $15 to $30 per $100 that you borrowed in a single payment.
Is a cash advance right for you?
A cash advance is often the best option for borrowers, especially when their credit score is low or if they have no credit history and don’t have access to other lines of credit. Would-be-borrowers may be scared of taking a cash advance because of the high APR, however, sometimes it is still the least expensive option. The fee for a bounced check, a late bill payment, or getting utilities turned back on after falling behind on bills can be higher than the APR for a cash advance.
Simply put, if a cash advance can help you stay afloat of bills that are piling up, it can save you more than it costs you. Another advantage to getting a cash advance is that you can access to the money very quickly whereas applying and obtaining a loan through a bank can take days or weeks.
Any kind of borrowing can get you into trouble if you aren’t careful. A cash advance is intended to be short term. If you can’t repay the full amount by your due date, you may have to pay additional fees and/or interest to extend the loan and the APR can quickly get out of control. To avoid getting caught in a cycle of debt in which you are regularly applying for cash advances just to get by, you should take a close look at your finances before applying for a cash advance to make sure it’s feasible for you to repay your loan on your next payday without compromising your ability to pay your other bills. You shouldn’t make it a habit to get cash advances to pay for non-necessities. If you think it’s unlikely that you’ll be able to repay the debt in a one-time payment on your next payday, you may want to consider an installment loan which will allow you to break up your payment into several smaller ones spread out over a month or two.