Skip to main content

A cash advance is a short-term loan which provides customers with the opportunity to borrow money quickly. Those in need of urgent money to pay for an important expense or financial emergency can secure fast cash to help tide them over until they receive their next paycheck.

With over 12,000,000 Americans taking out loans each year, cash advances are extremely popular. This guide delves deeper into the nature of cash advances, and the pros and cons of taking one out.

 

Key points:

  • Cash advances provide a quick injection of cash to help tide borrowers over until they receive their next paycheck.
  • Benefits of cash advances include that borrowers can use them to pay for emergency expenses or urgent bills.
  • Borrowers must however make sure they will be able to comfortably meet repayments before taking out a loan.

 

cash

 

What Are Cash Advance Loans?

 

Cash advances enable customers to borrow money instantly to help cover unexpected payments. It is a short-term loan that can be used to pay off important costs so that borrowers do not need to wait until they receive their next paycheck on their payday.

Cash advances provide borrowers with fast cash – the funds are usually transferred to the customer’s checking account within minutes or hours of applying, or by the next working day. Borrowers will just need to submit a loan application before doing so, including key information such as their employment status, age and contact details. They will also need to state the amount of money they would like to borrow, for instance they may wish to borrow $800.

 

Why Might You Need A Cash Advance Loan?

 

There are many important reasons why US residents may need to borrow a cash advance. Examples include to pay for:

  • Medical costs
  • Dental fees
  • Vet bills
  • Home repairs
  • Car repairs
  • Funeral costs
  • Weddings
  • Engagement rings

Cash advance loans should not be taken out to pay for any unnecessary spending such as shopping, gambling and drinking or to help pay off other debts. Similar to payday loans, they should only be used if you are tight on money and urgently need to pay for an important expense. Ideally the loan will then be paid back in the next few weeks or months once the borrower has received their next paycheck from their employer.

 

What Are The Advantages Of Cash Advance Loans?

 

Being able to secure money quickly is certainly the main advantage of cash advances. Rather than having to wait a few days or weeks to get the money they need, a borrower can receive instant cash within minutes, hours or at worst by the next business day.

Borrowers do not need to wait for their next paycheck or go through the long process of trying to be approved for a bank loan, they can get instant funds transferred to their bank account in a speedy and efficient manner. Whether customers need to borrow $300, $500, $1000 or more, they can be granted early access to cash and ease their financial burdens before payday.

Alongside being a straightforward process, cash advances are one of the easiest types of funding to qualify for. With options for those with bad credit or no credit histories, there are lenders who consider customers from all types of different financial backgrounds. Borrowers also do not have to worry about justifying what they are using the funds for since there are no restrictions on how the money can be used.

 

What Are The Disadvantages Of Cash Advance Loans?

 

Whilst borrowing a cash advance loan can be extremely useful, it can also lead to financial pressures if it is used incorrectly. The short-term loans typically include high interest rates and additional fees so it is essential that borrowers are certain that they will be able to meet repayments before agreeing to the loan. There is usually the option to repay back the loan early to save money on interest, however it is still important to check all the terms and conditions of a cash advance before taking one out.

It is also not guaranteed that all applicants will qualify for a loan. Even if a credit check is not carried out, some lenders may reject the application based on other clauses if they feel that it is too risky.

 

What Are Alternatives To Cash Advance Loans?

 

There are many alternatives to cash advance loans that might suit customers better. This includes borrowing from family or friends, using credit cards, looking into an authorized overdraft or lending money from an employer.

Borrowers should definitely weigh up the pros and cons of each option to decide what is best for them. If they are still keen to take out a cash advance loan and are certain they would be borrowing money for the right reasons, then they must just make sure they will be able to repay back the loan to prevent any further charges. Whilst lenders may offer alternative more flexible repayment plans if the borrower runs into financial troubles and is unable to meet repayments, this is not guaranteed and so should be avoided.

credit-card

 

How Do I Get A Cash Advance Loan?

 

You can borrow money online today through Dollar Hand. As an online brokerage service, we connect our customers with the most reputable lenders across the US who offer the most affordable rates. Users just need to complete our online application form to receive an immediate loan offer from one of our lending partners. If they approve the loan, the cash advance will be in the customer’s bank account in the snap of a finger!

Justine Gray

Justine is a full-time writer, specializing in household income and consumer finance across the US.