How to Pay Off Cash Advance Loans
A cash advance is a short-term loan offered by financial institutions. Often, it’s used to cover short term financial situations such as unexpected expenses. Besides, it provides you with extra cash before your next paycheck. Notably, cash advances are not for long term financial solutions. Therefore, you should have a good plan to pay off your cash advance loans in time.
Although it seems like an easy way to get cash faster, it attracts high-interest rates from lenders. Before applying for a cash advance, ensure you familiarize yourself with terms and conditions to avoid unpleasant surprises.
Even though lenders often charge additional fees with high-interest rates. These loans are still attractive to people as they are beneficial in terms of fast approval and processing times, quick funding, and easy application. Moreover, they are available for people with low credit scores.
Types of Cash Advance Loans
- Credit card advance
Credit card advance loan is the most popular type of advance loan. With this loan, the loan is approved very fast. It allows people to make purchases and pay bills using their cards. Once you receive your next paycheck, the loan is deducted to repay.
- Payday Loans
Payday loans are short term loans, and the borrower is expected to pay on their next paycheck. To get this loan, you need to provide your employment details for approval.
- Merchant Cash Advance
The merchant advance loan is issued by lenders such as banks to merchants or companies. The loan is issued to business owners with an agreement that the lender will receive a portion of the profits.
How to Get a Cash Advance Loan
1. Be qualified for the loan
The first step to get a cash advance loan is to meet the required qualifications. Here are some qualifications:
- Must have a driver’s license or a government ID
- Must be over 18 years.
- Should have a steady income and proof documents as the lender will want to know how you will repay the loan.
- Should have a Social Security Number so that the lender can identify you and prevent potential fraud.
2. Choose a Lender
When choosing a lender, make sure you compare different financial institutions to find the one with the best interest rates. Cash advance loans are charged high-interest rates; hence you should ensure that you do not overpay.
You can choose a lender that you had previously borrowed from. This will make your application faster. Make sure you gather all the documents necessary to ensure a seamless application process.
3. Apply for the Cash Advance Loan
The application process for most lenders is efficient and simple. It takes about 10-20 minutes to complete the application. The application is made online, and you can apply in the comfort of your home. Here is an outline of the application process.
- Visit the lender’s website
- Fill out the application form
- Provide all the required documents
- Return the application. You can return it via the website or physically
- Wait for your loan approval
Cash Advance Loan Approval
Cash advance loan approvals take a few minutes to some hours, depending on the lender. Once the lender has checked the application form and your documents, the money will be deposited to your provided bank account. Most lenders will fund your account on the same day as your application. Loan approval is determined by:
- Credit score. If your credit rating is low, the loan approval may take time. Furthermore, you may qualify for a lower amount than you had applied. However, with payday loans, your credit history does not affect the loan approval.
- Income. The lender accesses your income and your ability to repay the loan. If your income is high, you will get a higher amount than those with low incomes.
- State Regulations. It is important to know your state regulations about cash advance loans.
How to Pay Off Your Cash Advance Loans
Cash advances are short-term loans that are typically paid in weeks or the next payday. Different financial institutions have varying repayment periods. During the application, make sure you note the repayment date so that you do not fail to pay on time. Late repayments can cause additional fees and lower your credit rating for future loans. The lender should provide you with different payment options.
Ways to Pay Off Your Cash Advance Loans
- Pay through automatic withdrawal from your account.
One of the easiest ways to pay a loan is through automatic withdrawal from your receiving account. In this, ensure that you give your account details. Additionally, ensure that you have cash when the loan is finally due. The lender will make the withdrawal only when the loan is due.
- Online Payment
Repaying your loan online is easy and convenient. You need to have an online account so that you can transfer funds to the lender. Online payments are encouraged, as you will have a seamless payment experience. It also saves money as you do not have to follow up with paper billings and statements.
- Partial Payment
If you are having challenges repaying the loan, you can consider partial payments. You can start by submitting small amounts to the lender every week instead of repaying the whole amount at once. Ensure that you discuss with the lender before making partial payments to avoid penalties and interests.
- Pay the Loan Early
Paying your cash advance loan early comes with many benefits. You don’t have to wait up to the due date to pay. The benefits include: saves on interest rates and additional charges. Moreover, you avoid late repayments and increase your chances of qualifying for more loans.
Cash advance loans are hassle-free, unsecured, and a faster way to get cash. Moreover, they are helpful for people with bad credit and those who do not qualify for other loans. However, you should pay the loan on time to avoid additional fees. If you cannot repay the loan on time, contact the lender, and inform them. A fair lender will establish other payment arrangements to help you clear the loan.