What is Cash Advance Loans?

There are times when you need cash really bad and loans could take a while to get approved. There’s nothing to worry about in these instances as there are cash advance loans available these days. These are loans that can quickly and easily be applied for to give you cash right when you need it. There are some important factors, however, that you need to be aware of before you file your application.

Cash advance loans are short-term loans that offered by banks and financial institutions. These loans have smaller loanable amounts, usually determined based on the borrower’s expected cash inflow. But, they also have higher interest rates. This is generally because of the risk that the banks assume by granting loans without a lot of document requirements or credit checking. These loans are also commonly made available to borrowers with no or low credit scores.

Types of Cash Advance Loans

Even with higher interest rates, cash advance loans remain to be popular as they answer the need for quick cash. For individuals, proceeds from these loans are using to pay for emergency expenses or for immediate payables like utility bills. For companies and businesses, these provide them with quick funding for some of their operational needs.

A common type of cash advance loan is the payday loan. This type of loan is pretty straightforward. The borrower takes out a loan and then repays it on the next payday. The lender may require the borrower to issue post-dated checks or to sign an auto-debit agreement to facilitate repayment.

There’s also the credit card cash advance loan. With this, the loan is borrowed against the credit card limit. The loan proceeds can be disbursed through ATMs or over-the-counter in the form of cash or check. Depending on the amount of loan, the bank may also charge fixed fees depending on the size of the loan.

Merchant cash advance loans are likewise available to small businesses and start-ups. These loans help businesses fill funding gaps so they can continue operating and generating income.

Anyone who wishes to borrow money through cash advance loans should be very prudent. As the interest rates are high, these loans should only be taken out when money is absolutely necessary and when there is some level of certainty that the next cash inflow will be enough for the repayment. More Details…

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