Cash advances, also called payday loans, are a type of loan available to people with bad credit and no credit. Anyone can apply for a cash advance and the requirements for these short-term loans are few. Funds can be used for any purpose, such as an automotive repair, a medical bill or other unexpected expense. A cash advance is a practical alternative to a bank loan, but before applying for cash, you should understand exactly how these loans work.
What You Need to Qualify?
Although cash advance loans are easier to obtain than bank loans, acquiring funds involves more than filing out an application. Like any financial institution, there is a review process and applicants must meet the minimum loan requirements. To qualify for a payday cash advance, lenders require a steady income source. You have to earn a minimum of $1,000 a month and be at least 18 years old. Cash advance lenders also require an active bank account. The bank account must be at least three months old.
How to Apply for a Loan?
Complete a loan application with the chosen cash advance lender. The application will ask for basic information, such as your name, address, driver’s license number, employment status and the requested loan amount. There is no credit check, but some cash advance lenders do require a Social Security number. Be prepared to hand over or fax documentation to confirm your income and identity. This includes a copy of your driver’s license, a recent paycheck stub, a voided check and a utility bill.
Cash advance lenders are known for their rapid response time. Once you provide your application and information, some lenders will approve or deny your application in under an hour.
How Does the Loan Work?
Cash advances work like any other type of loan. A lender approves your request, issues the funds and you repay the lender. The main difference is that cash advances are due in full within two weeks. The lender does not issue a check. Instead, the company deposits funds directly into your bank account within one business day. Deposits take place after you agree to the terms of the agreement and sign the loan papers.
Always read your loan agreement carefully before signing. This agreement indicates your loan amount, as well as loan fees and your due date. Depending on the lender, you can pay as much as $30 per every $100 borrowed. Take out a loan for $500 and you could pay up to $150 in loan fees.
Repaying a Cash Advance
It is important that you understand the repayment terms of your agreement. There are two ways to repay a cash advance. You can give your lender a post-dated check for the balance plus interest, in which the lender holds the check until your due date. Or the lender can deduct the balance plus interest from your bank account on the due date. Whatever method used to repay your loan, make sure that funds are available or risk additional fees.