Taking out a cash advance to make up for overspending is not the best way to utilize this fast money option. A responsible cash advance company would not advocate using these short-term loans as a way to live beyond one’s means. Some people opt for the cash advance option on their credit card instead. The two cash advance options are completely different with the same given name.
An online cash advance is a short-term loan.
There are many companies offering online cash advances through simple free applications which require no credit bureau check. Once you have sent in all your qualification information you could be approved within the hour and get your loan amount directly deposited into your bank account the next business morning. The money loaned to you will be based on any state regulations and your monthly income. You will be free to spend the money as you need it and the payoff will be scheduled according to your next pay period. Most often the term of the loan averages 14 days. The borrower will be required to pay off the loan plus fees at that time. Just as the loan amount is directly deposited, the payoff will be debited in the same fashion. Any change on the borrower’s payment time will need to be addressed through some form of communication. The last thing anyone needs is additional fees charged on their bank account if there is not enough money to cover the payment.
If for some reason, your loan is not paid off on the original due date, a second date will be chosen correlating once again with your pay cycle. The high interest associated with online cash advances will then accrue against your balance during this next term. This cycle (or cycle of debt as some call it) will continue until the balance is paid in full. Anytime you can pay extra or pay sooner than your payoff date, your loan will have less interest charges. An online cash advance lender will not charge you for paying off your loan early.
A cash advance associated with credit cards is run very different. The money available to you is a certain percentage of your credit line. This line of credit has a different interest rate attached to the money used than purchases are charged. If you look at the fine print on your credit card statement it will tell you the interest rate for purchases and the one for cash advances. As soon as you take out the cash advance, the interest rate will start accruing on that amount. Your available credit will lower by that amount as well. As credit card balances go up, you run the risk of having your credit score go down by showing too much debt. Most credit agencies look for balances to be under 30% of your limit. A percentage of each monthly payment will go towards purchases and the rest towards cash advances. You could end up paying a high fee amount by the time the balance is paid off.
The two cash advances are very different, but yet will offer a person additional spending power. You will pay a price for using third party money, so make your choices carefully. Use the option which will best suit your needs without overspending. Sometimes, it makes more sense to cut back rather than spend the extra on fees.
