Cash advance loans allow Americans to get cash quickly when they need it. These convenient, short-term loans can be a reasonable solution to financial problems. By submitting a fast and easy application form, it takes up to 24 hours to get the requested amount of money.
If you consider borrowing money in the cash advance format, you are free to contact any of the available lenders. Let’s see if there is anything else you should know about it!
What Stands Behind Cash Advance Loans?
Cash advance loans from direct lenders are designed for borrowers who require financial aid here and now instantcashtime.com. Being small-dollar amounts, they are meant to help you survive until your next paycheck. Some lenders allow you to borrow as much as $10,000 for 31 days. This is more than enough to sort out your financial problems.
High finance charges
The average APR on a cash advance is estimated at 23.68%. This is eight points higher than a standard interest rate.
The fees take the APRs to the sky. Additional penalties also affect the APRs after being imposed for late repayment. The fine print is an extremely important element of lending services. Never ignore it!
Debt cycle risk
Overdraft and late fees can drag you into a debt cycle. If you need cash here and now, you also need to spend it by the due date. You usually have up to four weeks or one month to pay back what you owe.
Pros and Cons of Credit Card Cash Advances
Cash advance loans from direct lenders have positive and negative aspects. Make sure to know them well before applying:
- Convenience: Compared to other loan products, this one offers instant approval and fast funding. All you need to do is find a local ATM.
- Available in emergencies: If you don’t have sufficient funds in your bank account and/or your credit card doesn’t work, your chances of getting a cash advance seem pretty realistic.
- Cost: Cash advances usually come up with a high service fee and an even higher interest rate. Fees may range from 2% to 5% of the amount, while interest rates depend on a loan amount and a repayment period.
- Credit score implications: Credit card cash advances may affect your credit because high credit utilization can pull your score down.
Do Cash Advances Hurt Your Credit?
Using a cash advance doesn’t directly affect your credit score. Doing so means you have to repay a high-interest loan. If you fail to do so, you will face strict penalties which will take your credit score down. Next time you decide to borrow money from a direct lender or any other financial institution, you will experience some more difficulties.
A cash advance can also raise your credit utilization ratio. It is estimated as your credit card balance against your credit limit. For example, you borrow $1,200 and you have a $4,000 credit limit. Your credit utilization is then estimated at 30%.
The higher your credit utilization, the more negative impact it can have on your credit score. It literally demonstrates that you are a risky borrower.
Is a Cash Advance Right for You?
Cash advances should be a last resort for you to get the necessary amount of money. If your emergency expense can’t wait until your next paycheck and your parents can’t help you cover it up, you will most likely have to refer to direct lenders.
Maybe you have broken your mobile phone and you need it for work. The repair will cost you a solid amount of money. What is the way out? You head to find an ATM and take out a credit card cash advance to cover the costs. Make sure you have sufficient income to make repayment on time. So the decision to take a cash advance shouldn’t be spontaneous. Think everything through beforehand.