Tips for Making the Most of Cash Advance Loans

According to CNBC, about 22% of Americans have a personal loan.

If you need some emergency cash quickly but don’t want to go through the hassle of a personal loan, you can always apply for a cash advance.

Cash advance loans can help you get fast cash, but they can be tricky with certain repayment requirements. Keep reading to learn how to make the most of your cash advance.

What Are Cash Advance Loans?

Cash advance loans are short-term loans that allow you to borrow within a set limit. You can use it to cover emergency finances or needs. 

You can use this cash for any purpose, and it’ll normally be debited from the balance of your credit card. There are a few different types of cash advances though. 

The cash advance typically comes from a credit card, but it also has a higher advance APR than the normal balance on your credit card. Because of this interest, you need to fully do your research to ensure that you’re getting the best deal and not ending up in even more debt.

What to Consider Before Taking Cash Out?

If you’re considering taking out a cash advance, you’ll need to understand four important metrics to ensure you’re getting the most out of your loan. Doing this can help you utilize your money in the best way.

The first thing you need to understand is your credit score. Withdrawing this cash advance will hurt your credit score a little bit, and it will be on your file for other lenders to see. 

This could also affect your ability to get a larger line of credit in the future. So you may want to keep this in mind if your credit score is already lower than you would like it to be. 

You’ll also need to figure out how much money you want to take out. You’ll have to check your credit limit and figure out how much you can use for a cash advance. You don’t want to end up taking out a lot of withdrawals, so take time to figure out exactly how much you need. 

You’ll also need to know what the cash advance fee and amount withdrawal will be. Most credit cards charge a cash advance fee, and it could be higher than the interest you’d pay on your normal credit limit. 

You’ll need to check for minimum charges, especially if you plan to only withdraw a small amount of cash in your advance. 

How Do They Work?

A cash advance is a short-term loan, and when you take it out, you’re borrowing against your line of credit. You can normally take this out in a few different ways. 

If you go in person to a bank, you can ask for a cash advance there. You can also use a convenience check that comes with your credit card, and you’ll use it to write a check to yourself. Once it’s written, you can deposit it and get the cash.

You can also go to an ATM if your credit card has a PIN. If you don’t have a PIN, you can always request one. It could take a few business days to get a PIN, so if you don’t have one and need cash fast, try one of the other methods. 

Know the Types of Cash Advances

To get the most out of a cash advance, you should know about the different types that you could apply for. Most often, they’re through your credit card company.

Credit Card Cash Advance

This is a form of debt that lets you borrow against your credit limit, which already exists. You can withdraw money from your outstanding balance and then use it however you want.

It’s one of the fastest ways to get cash and use it immediately. However, the cash advance fee is normally a lot higher than the interest that they’ll charge when you use your credit card normally. 

Because of this, you need to ensure that you can pay off this type of loan as quickly as possible. 

Payday Loans

Payday loans are short-term loans that you can access within one business day. They’re transferred directly to your bank account through direct deposit. 

However, you need to pay them back as soon as you get your next paycheck. That’s because you’re taking the cash advance from your next paycheck. 

Payday loans are normally a smaller amount, and they can end up being even more expensive than taking a cash advance from your credit card. However, the fees are normally flat fees and depend on how much you’re borrowing. 

Merchant Cash Advances

A merchant cash advance is a special type of loan and financing that is designed for business owners. It’s based on the volume of your business’s credit card sales, rather than your financial history and credit score. 

You’ll be able to get an upfront cash advance for a percentage of your business’s daily credit card sales. You’ll have to pay that along with all of the interest and fees until you pay off the loan.

However, while these might be a faster way to get cash, they also come with higher interest rates and fees than a traditional loan would. 

Understand the Fees

Before you accept this loan, understand all of the fees and terms that come with it. These loans are normally known for their high-interest rates and fees. 

You need to make sure that you have a way to pay them back, or you could end up owing way more money than you ever borrowed.

Have a Plan to Repay Them

Before you take the loan out, try and come up with a plan for how to repay it. Consider your income and all of your bills and expenses.

Find a way that’s doable to pay off the loan so that you don’t have to worry about any of the interest charges or additional fees. 

Only Take Out What You Need

You should only withdraw as much cash as you actually need. Try to resist the temptation to have a little bit of extra money, because you’ll have to pay it back with a lot of interest attached. 

You’re also paying the fee based on the amount that you take out. This makes it harder to pay it back, so try taking out the most that you need to cover your emergency. 

Research Your Options

You should also do all of your research before taking out a cash advance. You want to ensure that you’re getting the best deal possible, so you can use a loan comparison website. 

You can even talk with different lenders and check all of the fees and interest rates to make sure that you’re getting the best deal. 

Also, be sure to stay away from any online scams. There are plenty of legitimate lenders out there, so do your research to avoid being scammed. 

Read the Fine Print

Before signing or accepting a cash advance, take a moment to read the small print. This can be overlooked, and sometimes there are giant hidden fees in the terms and conditions.

You want to know exactly what type of loan you’re getting yourself into. You should know the amount of the cash advance that you’re taking out, and how much the interest will be. You should also be aware of any fees that come with it. 

The small print will also give you information on what happens if you can’t pay back the loan. The lender may be able to take legal action against you. This could look like getting money from your bank account or even taking money from your wages.

It could even negatively impact your credit score. 

You should also know what the repayment conditions are. You might have a grace period before you have to start paying it back, or you could have to start paying it back immediately when you get the money. 

Missing payments on a cash advance can have serious consequences, so to make the most out of it and ensure you don’t end up in serious debt, read all of the fine print. 

Learn More About How to Make the Most of Cash Advance Loans

These are only a few things o know about how to make the most of cash advance loans, and now you’re ready to take out a loan.

If you’re in the research stage, we allow you to find the best lender to get you cash quickly.

Check out some of our options to get fast cash!