Cash Advance

A cash advance is money that is lent to the borrower for a time period that only lasts until the next time the borrower is paid from their regular income source. For most persons this is a week or two. For others who are only paid on a monthly basis the term can be until that next payday even though it is a month away.

It is not necessary to borrow a large amount with a cash advance. It is best to borrow as little as possible because cash advance fee rates are very high. Fees can be $15 to $25 or even higher per $100 borrowed. A cash advance is usually found at a payday loan store or online payday lender website. These types of loans are not done at banks because the bank is restricted to a very small interest rate by comparison and they cannot profit from these small short term loans.

To qualify for a cash advance it is necessary to show proof of regular income and be of adult age. A bank account is also necessary for transactions. Even though a cash advance is not credit and it is not a secured loan it is backed by the borrower’s bank account. At a store the borrower will either leave behind a check or sign an ACH withdrawal form. Online cash advance websites have an application form that includes the ACH withdrawal information within the application.

It is important to be sure there is enough money in the bank account at the due date to pay the loan amount plus fee or it will be processed just like a bounced check and even more fees will be applied. A bounced check can go to a legal collection process. Most people can qualify for a cash advance.