How to Get Cash Advances with Bad Credit

There are two possible sources to consider for bad credit cash advances. The first source is a secured loan, or a loan using collateral. This option is often less expensive, but it can present a greater risk if you default. The second primary source for this type of loan is a high-risk or payday lender. These lenders will often require no credit check at all, but they can have much higher interest rates and stricter financing agreements.

Secured Loans

Traditional lenders, like banks, will be wary of issuing even a secured loan if you have bad credit. While it is always fine to seek a quote from a bank, you will most likely need to use a dedicated secured loan lender to find this type of arrangement. For example, there are a number of auto title loan lenders in most markets. If you own or partially own your car, you can use the car title as collateral to get a loan up to the value of the vehicle itself.

You may also use other sources of collateral for a secured loan. Nearly any asset will work, not just the traditional sources you may think of. Lenders will be willing to give you a cash advance against a tax refund, a stock certificate or even a savings account. This is helpful because each of these items represents cash that you have or will have in the future. You can increase your current liquidity based on these assets without selling or surrendering the assets all together. You will still have the asset at the end of the loan as long as you repay the debt successfully.

Payday Loans

Payday loans, which are the more typical form of cash advance, do not use any collateral at all. You can secure a payday loan despite a lack of assets as long as you do have a revenue source. Most of the time, the lender would like you to have a consistent income. You can prove this by showing concurrent paycheck stubs for up to a few months of salary. The lender will extend you a loan for the sum of your pay in advance, and then you pay the lender back once you have received your paycheck. Payday lenders rarely ask for credit checks. They may not even report the debt to the credit bureaus, meaning there will be essentially no consequence to the loan if you meet the payments on time.

Unfortunately, it is all too common for borrowers to default on payday loans. Most have the best intentions of making the payment, but high interest rates can quickly mean the loan is not affordable for a borrower. Payday lenders rarely offer any payment schedule. Instead, they will ask for the entire loan sum to be paid at the date of maturity plus interest. If you do not have the money, payday lenders will ask you to take another loan to pay the difference. This leads to a debt cycle reported by a number of payday loan borrowers. If you have the asset to serve as collateral, a secured loan from a more reputable lender is usually a safer option.


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