Cash advance loans are short-term loans that typically carry a relatively high interest rate, making them less affordable than car title loans. Due to their higher cost, cash advances are typically used only for financial emergencies when all other options have been exhausted.
However, though they’re expensive, cash in advance loans have become extremely popular because they are typically fast, easy to get, rarely require credit checks and are available both in person and online.
Cash advances are especially popular with people who have terrible credit, or who have had to declare bankruptcy, lost their home to foreclosure or had cars repossessed, but are they worth getting, or do they just make your finances worse?
Pros of Cash Advances
- They’re quick, with some being able to provide funds in under an hour, or within minutes of being contracted
- Cash advances are available to virtually anyone, even people with no credit history or terrible credit scores
- Typically no collateral is required to secure a cash advance
Cons of Cash Advances
- Interest rates are relatively high, with some cash advances ranking at the very top of the most expensive forms of raising money
- They’re often extremely effective at solving immediate liquidity crises, but can lead to serious long-term financial problems
- Even small amounts of money can end up costing great sums due to interest rates, penalties and hidden fees
- Cash advances aren’t typically regulated the same way as loans, and don’t provide borrowers as much legal protection as traditional loans
Types of Cash Advances
Credit Card Cash Advances
Credit card cash advances are easy to get, but only if you’ve already got a credit card. The way they work is that instead of using your card to purchase something, you can use it at an ATM or in person at a local bank to withdraw cash. This might be extremely convenient, but beware that it also comes with a pretty high interest rate and significantly more than you’d end up paying by using it in the normal way.
Neighborhood Loan Cash Advances
Cash advance neighborhood loans are extremely popular right now due to the sputtering economy, but these should be avoided at all costs unless you’re facing an absolute financial emergency. Neighborhood loans tend to trap people in infinite loops of debt, quickly building up piles of debt that can virtually never be repaid, and leading to severe long-term economic problems.
Getting a cash advance neighborhood loan requires that you promise to pay back the loan, in full, before you receive your next paycheck. If you’re already strapped for cash, so much so that it requires taking out a loan, how do neighborhood loan lenders think you’re going to be able to come up with their money before your next paycheck?
It’s simple – they don’t! They want you to miss that deadline because then they can charge even more interest, forcing you into greaterer debt.
Faxless Cash Advances
If you need a cash advance but can’t or don’t want to visit a lender in person, you might be interested in looking into no fax cash advances. These are very popular and are basically an alternative way to refer to online cash advances. Faxless cash advances typically require you to submit information over the telephone or online, and most have about a 24 hour turnaround time to getting you money.
While no fax cash advances can be useful, they still come with extremely high interest rates, and should be avoided whenever other lending options (like vehicle title loans) remain available.
Online Cash Advances
With the growth of the Internet, high-speed connections and relatively ubiquity of email, online cash advances have become all the rage. Why? It’s simple – they’re easy, convenient and fast. Unfortunately, just like the other cash advances we’ve explained above, there’s a huge downside to getting your cash advance from an online lender – it’s extremely expensive!
No Credit & Bad Credit Cash Advances
Many cash advance lenders advertise “no credit cash advances” and “bad credit cash advances”, but in reality, virtually every cash advance is for people with credit history problems. Because cash advances are expensive, those with great or even good credit typically avoid them unless they find themselves in a serious time crunch (like if rent money is due that day and no other options are available).
If you have bad credit, or even no credit at all, there are still better forms of short-term financing than cash advances. As an example, car collateral loans typically come with significantly lower interest rates than cash advances, so be sure to check them out first.
Merchant Cash Advances
You probably aren’t interested in a merchant cash advance, unless you’re looking to raise short-term money for a business expense, like making payroll, covering operating costs during a slow period, or investing in some new machinery, technology or equipment. Merchant cash advances can be extremely useful for small companies that don’t qualify for traditional loans, but it should be noted that they too can be quite expensive, with some tagged at extremely high interest rates.
Business Cash Advances
Business cash advances are virtually identical to merchant cash advances and in many cases, lenders will advertise them using the terms interchangeably. If you just need money to pay the grocery bill, keep the lights on, or make rent, then you shouldn’t be looking at either of these types of cash advances, since these are specifically offered for business expenses. These can be had quickly, and can be an excellent way for small business to raise liquid money in a hurry, but they can also be quite expensive.
Should You Get a Cash Advance?
In a few words, probably not. If you’ve got any sort of assets, you’d likely be better off using them as collateral to secure a short-term, low interest personal loan. Before you rely on cash advances, make sure to at least consider taking out a car title loan, since title loans often come with a significantly better interest rate than cash advances, along with a better long-term financial outlook. Title loans are issued based on your ability to repay the loan.
If you’re at the end of your rope, be sure to call us at Car Capital Financial to see if we can help. We’ve provided affordable car title loans in California for over 15 years, and we can provide you with a safer, more effective solution to your financial problems.
Call us now at 1-888-500-9887.