A cash advance refers to a short-term loan that you can access from a bank or other lenders. This term can also apply to a service that most credit card issuers provide by allowing some credit cardholders to withdraw a specific amount of money.
Remember that cash advances can usually have high interest rates and fees. Regardless of this, they are appealing to many people because they have fast approval as well as quick funding. This article explains everything you should know about a cash advance loan.
Types of cash advance loans
You can find various types of cash advances on the market with different interest rates and fees. Here are some cash advances lenders are offering:
Credit card cash advances
Credit card cash advance is perhaps one of the common cash advances. You can borrow money based on a line of credit using a credit card. The cash can be accessed at an ATM or from a check that is cashed or deposited at a bank.
It’s worth noting that credit card cash advances usually attract a high interest rate. You can pay between 9 and 24 percent higher interest rate than the normal APR for purchases. Even worse, the interest starts accruing immediately, meaning there is no grace period.
Cash advances can usually include a fee that is either a percentage of the money you get or a flat rate. Also, if you utilize an ATM to get the cash, you usually pay a small usage fee.
Along with a separate interest rate, credit card cash advances can have a separate balance from your credit purchases. In some cases, a credit cash advance doesn’t qualify for low or no interest rate introductory offer. The good thing is that they are easy and quick to get.
When it comes to consumer lending, cash advances can also mean payday loans. You can find out more about UK cash advance loans, though they come with a certain fee and interest rate. Instead of considering your credit score, most lenders determine the loan amount based on some regulations and the size of your paycheck.
If the lender approves the loan, the lender can give you the cash. There are some transactions that take place online, so the lender can make an electronic deposit to your savings or checking account.
Payday loans are considered to be short-term loans, so you need to pay them back on your next payday. The good news is that you can also decide to extend the loan, but there is an additional interest that is charged.
The application process can be faster than securing a traditional loan. To get a payday loan, you just need to provide a lender with a postdated check. Then the lender can immediately give you the money but will wait to cash a postdated check on your next payday. You can also find some employers who give cash advances or payday loans as part of their services to employees. However, terms can vary and there are no fees or interest that are charged.