5 Questions to Ask Before Getting a Cash Advance Loan
Also known as a payday loan, a cash advance is a short-term, small dollar loan that you can use to cover an unexpected expense or get some extra money before your next paycheck. It is an alternative to bouncing checks and is intended to address short-term financial situations.
If you’re strapped for cash and want to get a cash advance, ask yourself these five questions. By doing so, you can make sure you are making an informed decision on your cash advance.
Do I need the money immediately?
One of the quickest ways to get a loan is through a cash advance.
Applying for a traditional bank loan or line of credit can take time to earn approval and the funds may not be immediately available.
But if you just need some cash to get you to your next paycheck, a cash advance can be your quickest solution. The review and approval process can often take less than a day and most cash advance lenders will pay you within 24 hours of approval – you can even get cash on the spot when you apply at a location. It’s for this reason that cash advances should be thought of as emergency loans.
If you can shift your budget to survive until your next paycheck, if you can rely on other ways to raise money, or if you can push off any emergency payments until after your next paycheck arrives, a cash advance may not be the best path forward.
Will I be able to pay back the cash advance by my next payday?
You should only take out a cash advance when you are certain that you will be able to pay back the loan with your next paycheck. Likewise, you should understand that your next paycheck will be that much less, so you should begin budgeting for that upcoming shortfall as well.
If the amount you need to borrow is more than you can pay back with your next paycheck, you may want to select an installment loan to spread your payments out across a longer period of time or find other ways to raise funds.
Does a cash advance affect my credit score?
Whenever you are unable to pay back a loan within the specified repayment period, your lender could report your defaulted payment to credit agencies, which will impact your credit score.
If you do successfully pay back your cash advance as agreed to, some lenders may report your successful payment to the credit agencies. While history of successful loan repayment that is reported to a credit agency can improve your credit score, not all cash advance lenders don’t report repayment to credit agencies.
Therefore, if you reporting repayments to credit agencies is a key criteria for your decision, you should ask a potential cash advance lender if they do report full repayments to credit agencies.
Is my cash advance lender trustworthy?
Organizations like the Better Business Bureau or Chambers of Commerce can provide you with history and information about your lender to help you understand if they are a fair lender.
There are also ways to ensure that the transaction with your lender is secure and protects your personal information from being compromised. Before you click submit for any online transaction, be sure that the webpage includes “https” at the start of the web address and a lock icon to the left of the address. “Https” ensures that the page is encrypted, and the lock icon tells you that the page’s certificate is secured and unable to be counterfeited.
You also want to be certain that the lender won’t share your private information with any third parties and provide a transparent policy to protect the security of your personal information. You can review Advance America’s policies for sharing personal information to understand how we protect your personal data.
How much will the cash advance cost?
Before taking out a cash advance, do your research and find out the total amount you will pay.
The fees you pay on a cash advance will be specific to the state you live in and many offer fixed flat rates that are based on the amount of your loan. Do the math to figure out if the total cost of a cash advance will be less expensive than any other options you have, such as incurring an overdraft fee from your bank or paying a bill late.
Many times, the cost of the fees for your cash advance is less than the cost of missing your payments or damaging your credit, then a cash advance is well worth it.
Cash Advance Loans From Advance America
If you decide that a fast cash advance is right for you, you can get one through Advance America. Once you apply online or in-person at a store near you, you can receive the funds on-the-spot or via direct deposit as quickly as the same business day.
Our friendly and knowledgeable staff will be happy to work with you to figure out the ideal time for you to repay your loan. We understand that a financial emergency can arise when you least expect it and are committed to helping you get the cash you need as soon as possible.