Cash Advances: How Does It Actually Work

A cash advance is a short-term loan offered by lending agencies and payday loan companies for emergencies including medical expenses and car bills. It doesn't require any credit or criminal background check. The process of obtaining a cash advance is rather simple. Applications can be completed online, and the information required covers personal, employment, and banking accounts details. Upon approval, the amount is deposited in the borrower's banking accounts.

There is usually no grace period with the repayment of cash advances and interest starts accumulating immediately in the event the repayment deadline is crossed.Since cash advances are unsecured, the rate appealing can be as high as 20%. The high rate of interest and short period of repayment might even force the borrower to borrow again. Thus it is important that people avail these loans only when it's an emergency, so as to not belong to a debt cycle.

If used judiciously, payday loans enable people to avoid late payment fees and even penalties linked to bounced checks. They also enable people to avoid negative marks on their credit score.Cash advances are available extending its love to those who have bad credit. The requirements for availing an advance loan include a minimum salary that is usually $1000 per month, an age above 18 years, with no delinquency on previous short-term loans.

Just how much that can be borrowed varies with all the lending institutions but is usually around $1000. First-time borrowers may be eligible for a higher loan amount. The fees rely upon the amount borrowed and the duration of the loan; some lenders charge a set amount irrespective of the term of the loan.The payment date for cash advances is usually the next paycheck date. In most cases, the period of the loan isn't more than eighteen days.

Lenders have the facility of a refinance what's available for is not able to repay the loan with the designated due date. With some lenders, the refinance option can be availed four times; others enable the loan to be extended to around 31 days from the day of receipt of the money. The borrower can repay by giving the lender with post-dated checks and the amount plus charges might be automatically deducted from the borrower's account about the due date.

Before opting for a money advance, one should do some research online for getting an understanding of the general terms and conditions and also compare cash advances along with other alternatives such as salary advances as well as an account with an overdraft protection.