Cash advances are short-term loans that can help you bridge the gap between your next paycheque and any outstanding bills or expenses that arise. A cash advance can help you avoid late payment penalties, cover emergency expenses, or put food on your table or gas in your tank. They have some caveats, but a cash advance can save the day if you’re in a pinch.
Here’s how to find a reputable cash advance provider and some tips for making the money work for you.
Understanding the Risks of Cash Advances
Cash advances are convenient for putting cash in your hand quickly, but they have some downsides that you should be aware of. Before taking out a cash advance, ensure you consider the potential risks.
- High Interest Rates: Many cash advances, such as payday loans or credit card cash advances, have notoriously high interest rates. This can make it difficult to pay your cash advance back quickly, causing additional financial strain.
- Potentially High Fees: Cash advances often come with high fees, too. Some payday lenders will charge a flat fee rather than interest on a cash advance, but these fees are expensive. And again, if you fail to pay back what you owe in a timely fashion, you could face late fees, insufficient funds charges, and more.
Before you take out a cash advance, analyze the fees and interest rates to determine whether it’s realistic for you to keep up with payments. A cash advance may solve a short-term problem but create bigger ones down the road if you’re unable to pay it back promptly.
Advantages of Taking Control of Your Finances with an Online Cash Advance
When you need quick cash in a pinch, an online cash advance can be a preferable alternative to payday loans or credit card cash advances.
Quick access to funds
One of the most appealing aspects of online cash advances is that you can access cash quickly. Once your online application is approved, cash will be deposited directly into your bank account. Sometimes within minutes.
Flexible repayment terms
Where payday loans and credit cards have very strict repayment terms, online cash advance lenders are often more flexible, making it easier for you to stay on top of payments without incurring penalties. For instance, with Bree, you can pay back your cash advance whenever you have the funds without worrying about incurring interest or late fees. This makes it easy to plan and budget for paying back your loan!
Lower interest rates
Online lenders often offer lower interest rates than what you’d have access to through credit card cash advances or payday loans. Because online cash advances are typically for small sums of money, lenders often offer lower interest rates. And fintech services like Bree don’t charge any interest at all! With Bree, you can borrow up to $200, interest free.
Tips for Using Cash Advances
Before taking out a cash advance, have a plan for how you’ll allocate the funds. Before borrowing any money, ensure you have a plan to pay it back without incurring fees or excessive interest. Here are some tips for making a cash advance work in your favour.
Research online cash advance lenders
Finding a reliable lender is key to securing a cash advance. They will make it easy to access your funds and provide clear instructions for paying back what you owe. Make sure you look up reviews for lenders before you apply. While there are many reputable cash advance lenders out there, some are simply trying to make a quick buck.
A reliable lender will clearly outline the application process, how you’ll receive the money, and the repayment terms.
Be mindful of the timing
If you’re looking for a cash advance, you probably need funds as soon as possible. The speed at which you’ll receive money from a lender depends on their business model. In some cases, you’ll have funds within 24 hours, while others may take several days to process your application. Make sure you’re clear on when to expect your cash advance to come through. Depending on how quickly you need the cash, this could influence which lender you opt to work with.
Gather the necessary financial information
Depending on the lender, you may need to provide pay stubs, bank statements, or your social insurance number to authorize a credit check. Ensure you have all of this information on hand before you start the application.
Understand the repayment terms
Understanding the repayment terms of your cash advance is key for avoiding late fees and excessive interest, which could keep you stuck in a tight spot, financially. Review the repayment terms carefully and ensure you’ll be able to comply before you take out a cash advance.
Keep a note of the repayment terms on hand, even after your loan comes through. It’s easy for due dates to become lost in the shuffle, especially if you’re already stressed.
A cash advance can certainly help you cover expenses in an emergency, but it may not be the only option. And if your finances are uncertain, whether due to a layoff or reduced working hours, taking on a short-term loan to cover your bills may not be the best strategy.
If you anticipate being short on cash again next month, take action now. Can you pick up a side job? Sell some of your belongings online? Can you do some gig work, such as yard work or dog walking? Could you offer professional services online to bring in some extra money fast?
There are many alternatives to a cash advance that can help you have access to more funds on an ongoing basis.
Cash advances give you access to quick cash in a pinch when you need to cover emergency expenses. They can help you avoid late payment fees by giving you access to the cash you need to cover bill payments, and online cash advances usually give you access to funds within a couple of days. However, they may come with high interest rates and fees, and while they offer a short-term solution, they may contribute to financial hardship if you anticipate being repeatedly short on cash.
Before you proceed with a cash advance, make sure you find a reliable lender and are clear on the repayment terms and any associated fees so you can budget accordingly and pay your advance back on time.