Life is a roller coaster and from time to time something will happen, and we will need a sudden amount of cash that we just don’t have. What do we do in these scenarios?
Well, you could take out a loan, but sometimes the amount you need is not big enough to warrant a loan, or perhaps you are worried about your credit score or financial stability overall.
Are there alternatives to taking out a loan like a personal loan or otherwise? Yes, there are, and some of the options you have are easy and simple.
These are cash advances, however, like anything else in the world they have pros and cons., so while they can take away the time it would otherwise take to apply for a loan, and take away all the paperwork… There can be some high costs too.
Check out how to get a CreditNinja cash advance to see how it’s done online, and keep reading to find out more.
What Is A Cash Advance?
Cash advances are short-term loans that you can get from a financial institution, including banks. Often these loans will have high interest rates, and high cost fees.
However, on the positive side they do allow you to get hold of much-needed cash quickly. While another loan might take a few days, or even weeks to process, whereas these can be accessible to you in minutes or hours.
We tend to think of credit card advances when we think of these, however, these are not the only advances you can get. But, the most notable thing about all of these is that costs of getting these can be very high.
What Are The Types Of Cash Advances?
Remember, we are not only referring to credit card cash advance loans, instead we are referring to getting cash advances as a form of borrowing. There are many types, however there are three primary types of cash advances. Let’s look at them.
Payday Loans
Payday loans are loans that give you a small amount of cash that you will repay on your next payday. They will usually require a proof of income, this can be a pay stub or something similar to show that you will be able to repay the loan.
These are not inherently bad, however, they do have a high interest rate, which means that you will be paying back a significant amount more than the actual loan itself. The interest rate can even be massively high in some cases.
Payday loans can often be around $100, but you could be charged $20 for the loan, and then you will have around 14 days to repay, which would make the APR 500% or thereabouts!
Credit Card Advances
This is the one you are usually thinking of when people talk about cash advances. You will be borrowing against a limit on your account. When you do this there is a limit, which is usually smaller than what your limit is for purchases.
The APR for this is often a few points higher than what you would have for transfers and purchases. Also, there is no grace period for these either.
This means you will start to accrue interest as soon as you get the money.
Merchant
This type of cash advance is used as a way for businesses to secure whatever funds they need. They will use past sales and future sales to project the size of the cash advance.
It is a bit like a pay stub requirement you have for payday loans. These advances are typically a quite easy way for a small business to gain money that they need as it only takes a few days to complete this type of advance.
How Do They Work?
The best way to understand what a cash advance is would be to remember that it is basically an advance on money you would probably have anyway, but you are just getting it sooner than you would, and in doing so, you pay to get it sooner than you would have.
There will usually be fees associated with this, this is usually known as a cash advance fee, of course, when you take out something like a credit card cash advance or payday loan you will usually end up paying higher APR rates than you otherwise would.
However, you can actually have a few different options for how you take out a cash advance.
You can do it online, where you may be able to make a request through a website or even a mobile app, which makes things a lot simpler.
You can also do it in person, at an ATM, or even via a convenience check.
As we have said, the main thing you need to remember with this type of borrowing is that you will find costs and fees higher than usual. We go over this because no one wants a nasty surprise when they have taken out a loan or advance of any form.
Cash advance costs are usually 3-5% of the amount, however, you will usually encounter additional costs which can send the overall cost much higher.
Should You Get A Cash Advance?
If you are in a predicament, and you need quick cash fast, a cash advance can be just the ticket, however, you should make sure that you have the incoming cash available to be able to pay the money back.
This means that you know you will be able to meet the payments needed as soon as possible. Understand the fees you will meet and what your options are, there are usually cheaper options available to you.
Check to see if you have any other options available before you take out a cash advance. In some cases you may be able to borrow from friends or family in the place of taking out a loan.
Doing that could work in the event that the amount needed is not a lot, and you avoid high APR costs!