Pros and Cons of Online Cash Advance Loans
By Space Coast Daily // July 26, 2021
Nearly 40% of Americans would have to borrow money if an unexpected expense came their way, according to the Federal Reserve. These numbers might be on the rise following a pandemic that laid off 22 million workers and caused many people to cash in their life savings.
If you’re struggling to pay an unexpected yet urgent auto repair, medical expense, or household renovation without savings, you may be looking to get a cash advance online.
Borrowing money is a big decision, so you should know what you’re getting into before you apply. Below are some of the pros and cons of using this financial product.
The Pros of Cash Advances
To start you off, here are the perks that make an advance an appealing option.
Pro #1: Convenient Platform
Walking through the automatic doors of a financial institution sounds easy on paper. But in practice, it can be a huge obstacle to borrowing money. You could live far away from your nearest lender, or their opening hours may be at odds with your schedule.
Going online for an advance is easier by comparison because you won’t have to go anywhere. Not physically, anyway. You can apply anywhere you get Internet, anytime that’s convenient for you. Most online direct lenders collect applications 24/7.
Pro #2: Fast & Easy Applications
Lengthy, complicated paperwork often stands in the way of getting a loan, but not always. Online cash advance lenders like to keep things simple for their customers.
As stated above, most online applications are available 24/7, and they usually take a few minutes to complete. These quick applications give you a chance to find fast loans online when you need them, provided you have the information you need to share handy. Contact details, banking info, social security number, and employment history are usually all you need, but check your lender for a more detailed list.
The Cons of Cash Advances
To contrast these perks, below are some of the potential drawbacks to using an advance.
Con #1: Can Be Costly
Cash advances come in all shapes and sizes. It’s an umbrella term that describes payday loans online same day deposit, lines of credit, and installment loans.
Your credit score plays a large role in what rates you’ll qualify for, with many banks outright denying you funds if your score is too low. That doesn’t mean you can’t borrow with bad credit, but it does mean you may only qualify for costly payday cash advances.
Some payday loans come with a 500% APR, so be careful when borrowing with subprime credit. Shopping around for alternatives to payday loans (like an installment loan) may help you dodge that bullet.
Con #2: Can Have Short Terms
Like rates, terms can also differ greatly, so there’s a chance you might be offered a loan due back faster than you can manage. Take, for example, payday cash advances. These financial products are due back all at once by your next payday, giving you just two weeks to repay what you owe on average.
High rates and short terms can create a challenging pair for people who live paycheck to paycheck.
Like any borrowing option, cash advances come with an equal number of pros and cons. Weigh them carefully before applying to make sure it’s the right option when you need help in an emergency.