Types of cash advance loans that you should know about
If you are in financial difficulty, knowing all of your financing options to resolve your current problem is important if you want to get out of this situation. Normally, one would resort to a traditional loan application from the bank. However, if you need cash fast and your credit score is less than stellar, you might want to go for alternatives like cash advance loans.
Cash advance loans are easy, fast and reliable, especially when you need immediate funds. But first, let’s talk about this type of loan in depth.
What is a cash advance?
Usually, cash advance loans are offered at traditional banks and alternative lenders. The term could also apply to a service that you can obtain from your credit card issuer against your available credit. However, you should note that cash advances usually have high fees and interest rates, but they are popular because they are quick and easy to obtain.
Let’s take a look at a credit card cash advance, for example. In a credit card cash advance, you will borrow against your line of credit. The amount you can borrow depends on your available credit, and the cash advance itself has a different interest rate. Fortunately, you can pay for both at the same time. When you are approved for one, there are several ways for you to get the money.
The first is done through an ATM. If you use a PIN code for your credit card, you can go directly to an ATM to get a cash advance. However, if your card does not require an ATM, you can request one from your credit card issuer. Note that it may take a few business days for your PIN to arrive.
Also, if your credit card comes with convenience checks, you can use them to write a check yourself to cash it or deposit it into an account. If you find these options inconvenient, you can simply go to the bank to collect the money.
So what are the types of cash advances available? Here are a few:
Cash advance by credit card
Credit card cash advances are the most popular type of cash advance on the market. It’s simple and very fast. If you only have one credit card for your day-to-day expenses, then you must have already encountered a lot of payment issues.
Not all vendors and stores accept credit cards, so you may need cash for payments. In this case, a cash advance becomes of great help. If your credit card has a PIN code, you can go directly to an ATM and get a cash advance.
If you don’t want to do this, you can go to a nearby bank with your bank’s payment network, such as a VISA or Mastercard. Remember that you need a valid ID for the transaction. Also, you have to remember that most banks these days do not allow the entire line of credit to be turned into a cash advance. Typically, a credit card cash advance is capped at a few hundred dollars.
Merchant cash advance
If you are a small business owner and currently need extra cash to keep your business afloat, a merchant cash advance can be helpful. A merchant cash advance is a type of business financing that helps businesses access cash.
The bank or lender will give your business the money it needs, and your business will pay it back with its next income. Having said that, a merchant cash advance is very beneficial for businesses that have limited assets and cash.
So how does it work? A merchant cash advance provider gives money to the business and collects it through business card payments. With this type of cash advance, the lender monitors your business’s cash flow through a terminal provider. This means that the lender does not have to do a credit check to approve your business for a merchant cash advance.
A payday loan is a type of borrowing option where a lender offers you a high interest loan to repay later with your paycheck. Its principal amount is usually based on your income and usually has a very high interest rate.
Payday loans are a type of unsecured loan which means that they do not require collateral. However, they have a damaged reputation as they can charge fees and other hidden costs.
Of course, the lenders who do this are in the minority. But generally, payday loans are quick and easy, and as long as you pay the cash advance on time, you can avoid other additional costs for late payment.
There are a few other types of cash advances that are not included in this article. However, the ones on the list are the easiest and fastest ways to get a cash advance. Remember to find one from a reputable lender to make sure the deal is clean and quick.
Millie Copper Story