Originally posted on https://bonsaifinance.com/consider-getting-online-cash-advance-lc/
Have you found yourself strapped for cash due to an unforeseen emergency? Do you feel like you just can’t seem to get caught up on your financial obligations? If so, an online cash advance might be the solution you need.
Although cash advances are convenient, they can also be costly. Before moving forward with a cash advance loan, you should understand exactly how they work. Here’s what you need to know.
What Is a Cash Advance?
A cash advance is a short-term loan, usually with a repayment period of one to two weeks. It may include any of the following:
- Credit card cash advance
- Payday loan
- Refund anticipation loan
- Online cash advance
Most cash advances have very short repayment periods and can have very high interest rates.
Cash Advance Fees and Expenses
The primary disadvantage of cash advance loans is the cost. When evaluating a loan, consider both the interest rate and additional fees.
Stated Interest Rate
The rates you pay are regulated by the state you live in and can be impacted by the amount you borrow. In many cases, the annual percentage rate (APR) can be as much as 400%.
Most cash advance loans charge additional fees on top of the stated interest rate. This is often a flat minimum dollar amount of $5 to $10 per loan. Other lenders charge a percentage, often between three and five percent, based on the amount borrowed.
No Grace Period
Unlike credit cards, cash advance loans usually don’t have a grace period. This means that your daily interest costs start accruing on day one. If you’re not careful, a small loan can quickly grow out of control.
Cash Advance Alternatives
Cash advance loans are usually an option of last resort. If you have a credit card, definitely consider using it first. Other options may include:
- Taking out a traditional, less expensive loan
- Borrowing cash from family or friends
- Tapping into your savings
- Request a payment extension on the money you currently owe
If none of these are viable options, then a cash advance loan may be the way to go.
Avoiding Cash Advance Pitfalls
There are some important guidelines to follow so you don’t get yourself into trouble with cash advance loans.
Evaluate Your Cash Flow
First and foremost, beware of taking a loan for more than you can reasonably expect to repay. If you miss a loan payment or pay late, you’ll end up paying costly fees on top of the already high interest rate.
If you’re not able to pay the loan back by the specified date, you’ll also have to pay a hefty fee to roll the loan over into a new repayment period.
Repay as Quickly as Possible
Faster loan repayment will help you avoid spending a fortune on your cash advance or payday loan. When setting up your loan, choose the shortest repayment plan you can reasonably meet. If possible, make extra payments to satisfy the loan even sooner.
Read the Fine Print
Read your contract carefully and be sure you understand all of the terms and conditions. Remember that advertisements often focus on the most positive aspects of the loan offer, and probably won’t mention the things that should concern you.
Do not make the mistake of simply skimming your agreement. Failure to complete this step can lead to unpleasant surprises down the line.
If you’re not sure what certain terms mean, ask for an explanation. Ask your lender to clearly show your total costs, in terms of both dollar amount and APR.
It may also be a good idea to have a knowledgeable third party review the loan contract before you commit.
Do Your Research
Unfortunately, there are some disreputable lenders who will try to engage in predatory practices. If the rates and fees offered seem unreasonably high, check out other lenders to see if you can find a better deal.
Don’t Make a Habit of It
If you need to take a one-time cash advance loan to cover an immediate need, it’s perfectly acceptable. However, if you’re constantly finding yourself desperately short of funds, you’ll want to reevaluate your budget.
Some alternatives may include taking on part-time work, selling some of your items, or reducing expenses.
Advantages of an Online Cash Advance
Despite the costs, there are some reasons to consider an online cash advance.
Cash Advances are Quick and Easy
When you need money fast, an online cash advance can be the easiest way to get it. The request process is usually short and simple, making it far easier than getting a traditional loan.
Approvals often arrive within minutes, and you can usually receive the funds as soon as the next business day.
Poor Credit is Often Accepted
Online cash advance loans are often available even for borrowers with poor credit. The lending standards are more relaxed, but you’ll still need to meet the lender’s qualification requirements and parameters set by state laws.
In Some Situations, Credit Just Won’t Do
If you don’t have access to a credit card, a cash advance loan may be your only option. In other cases, credit simply isn’t an accepted form of payment. Some examples may include purchasing items at a yard sale, making up a shortfall on your rent payment, or posting bail for yourself or a friend.
Considering an Online Cash Advance? Start Here!
If you’re considering an online cash advance, don’t make a move without thoroughly researching your options. Make sure the lender you’re considering is reputable before providing your personal information or entering into a contract.
Don’t have time to scour the internet for the best loan offers? Don’t worry, we’ve got you covered.
Bonsai Finance allows you to request credit with hundreds of lenders using a single request form. Your approval will come back quickly, so you can get the cash you need without a lot of hassle. Request your loan now, and you’ll see just how easy it can be!