Applying for a Cash Advance Loan: A Step-by-Step Guide

No matter how much money you make, sometimes things happen that you have not planned for and a cash advance loan can help you get the money you need to get out of a tight situation. Whether your fridge finally gave out or your car broke down and you cannot get to work without it, a cash advance loan gives you the instant money you need to take care of the problem. These loans are designed to meet short-term emergency needs and normally require repayment in full (plus interest) within 14-30 days.

Step One: Find a Reputable Lender

While you should be aware that cash advance loans or payday loans come at a price, with interest rates than rival those of credit cards, your best bet is to make sure you choose a reputable lender when applying. Check with your local Better Business Bureau to see if the lender has any unresolved claims, do not apply for cash advances through unsolicited emails that arrive in your inbox, and read the fine print before agreeing to any loan. Beware of companies who offer guaranteed approval or require no verification - these lenders often have much higher interest rates in order to assume such risk.

Step Two: Complete the Application

The application to obtain a cash advance is normally quite simple. Basic identification information will be requested, along with information about the amount of money requested and your ability to repay. Many lenders will simply have you post-date a check for the amount you borrow plus interest, or, if you apply online, the lender will require your bank account information and the loan repayment will be automatically withdrawn from your account.

Step Three: Sign the Agreement

Before obtaining your funding, you will be required to sign a loan agreement that obligates you to repay the loan with interest. It is important that you read through the agreement and clearly understand the obligation you are making. In most cases, the money will be automatically withdrawn from your account, and if you are unable to repay, you will be required to renew the loan and pay additional interest and loan fees. It is important if you use an emergency loan like this that you actually repay as agreed. If you do not, the rates you end up paying for the money you borrow often exceed the usefulness of the money.

Step Four: Obtain Your Funding

Cash advance loans are typically for no more than $1500, although you may find a lender willing to loan up to $2500 if you can provide proof of your ability to repay. Your money will either be given to you as cash if you are at the lender's place of business or direct deposited into your bank account if you are applying online. The funding, if you are approved for the loan, is very quick, often instantaneous.

Everyone has emergencies, and cash advance loans can be an effective solution, but it can be a costly one as well. Be sure to do your homework when finding the right lender, and consider tucking a few dollars away into a savings account for future emergencies.

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