Getting a cash advance loan can be extremely convenient, especially when you’re in need of fast financing. If you’re considering getting this type of small loan, then here are five things to know before submitting your application.
1. They Offer Fast Funds
If you need fast cash, a cash advance is a great option. Lenders that offer cash advances can make funding available the same day or, at a maximum, the next business day.
This is a stark contrast to how conventional loans work. A traditional loan application can take several days or even weeks to go through underwriting, process, and release funds. Borrowers who have time-sensitive bills or expenses won’t be able to wait this long and can rely on cash advance loans instead.
2. They Have Less Strict Credit Requirements
Your credit history is how many lenders will determine if they’re going to approve you for a loan. This is measured by your FICO Score. Your FICO Score is a number between 300 and 850 that represents your creditworthiness. The higher the number, the better.
Whereas some conventional loans will only work with applicants with a credit rating of good or better, cash advance lenders may be much more lenient. They understand that the applicants may be financially distressed. So, they will be more accepting of applicants with poor, fair, or no credit history.
3. You Can Use the Loan for Any Expense
Oftentimes, lenders offering traditional loans may have restrictions on how the funds may be used. For example, when applying for an auto loan, the lender stipulates that the funds must be used for the purpose of buying a new or used vehicle.
This is not the case with a cash advance loan. Cash advance lenders do not inquire about the reason why you’re applying for this loan. This means you are free to use these funds in any way you see fit.
4. You Don’t Need to Provide Collateral
Another great thing about cash advance loans is that they don’t require the use of collateral. Collateral is something of value that the borrower has to pledge to the lender (such as a home or a vehicle). If you default on the loan, then the lender gets to keep this collateral so that they can recoup their lost funds.
Because cash advances are short-term loans and for relatively small amounts, the lenders do not require collateral. That’s good news for applicants because it means that they don’t have to risk losing their assets.
5. You Should Understand the Fees and Repayment Terms
When taking out a cash advance loan, there will, of course, be terms such as the due date and fees that will apply. If you don’t pay back the funds you owe on time, then you will likely have to pay additional fees.
Before completing your application, be sure to read and understand all these details so that there won’t be any surprises later on.
The Bottom Line
Getting a cash advance loan is a convenient way to receive the funding you need. The credit requirements are more lenient, and funds can be received as quickly as the same day. On top of that, there are no restrictions on what the funds can be used for, and you don’t have to put up any collateral.
As with all loans, you’ll want to make sure that you understand the fees you’ll be charged as well as the repayment terms. Be sure to read the fine print before submitting your application.
