How to Get a Cash Advance Loan

Many consumers are a bit confused about exactly what a cash advance is, and this is really quite easy to understand especially since the term cash advance can refer to more than just a cash advance that is secured using your checking account. Understanding first the two types of cash advances is essential so that you can truly understand the differences so you are aware of what you are applying for. While some consumers have the ability to use both types of cash advances, others do not so knowing the differences can help you determine which is best suited to your needs.

The first type of cash advance is linked to credit cards. This is when a cash loan is obtained against the available credit line that your credit card offers. For example, if you have a credit card that provides a $5,000 credit limit and you have a cash advance limit on the card for $500 you would be permitted to borrow up to $500 from your available credit limit for a cash withdrawal on the card. This is typically accompanied by an increased interest rate that is charged as well as an initial fee such as 5% of the advance amount. You are generally permitted to make small payments on the loan. Overall, this is more expensive than the standard usage of your credit card, but it is an option that is available for many.

The typical manner in which a cash advance is used is when it is secured against your checking account. In this manner, you would go to a cash advance lender and write them a check. The check that you give them is post-dated to a date that is in the future, typically anywhere from 7 days to as much as 30 days depending on the terms of your loan. You would then sign a contract agreeing that you will pick the loan up when it is due, or the lender has the right to deposit the check into your checking account to get their money back.

If you notice that you are unable to afford to pick up the loan when it is initially due you can typically roll your loan over. This would allow you to simply pay the interest that is due on the loan, which will hold it for another loan term. However, it is extremely important to understand if you do decide to simply roll the loan over it can get extremely costly. If you are planning on picking up the loan when it is due you are able to get the best deal possible. Simply rolling over the loan continuously is extremely costly, if you can manage making a small additional payment towards the principal of the loan is a very good idea since it will ultimately lower the amount of money you need to provide at once to pay off the loan.

As you can imagine, the differences between a credit card based cash advance and a typical cash advance are quite large. Deciding which is best for you is a decision that you and you alone must make. If you are looking for just some short-term quick cash then often choosing a credit card based cash advance can be very costly making a traditional cash advance the much more affordable option.

Leave a Reply

Your email address will not be published.