How to Get the Best Rates for a $500-Cash Advance

Any time you are seeking even a modest $500 cash advance, the rates of your loan will determine the ultimate expense. Cash advance rates tend to be very high. As a result, even a small loan can result in 200 percent finance fees if you are not careful, greatly increasing the cost of your loan. To get the best rates, use traditional lenders, secure the loan with an asset, and ensure you pay the loan off on time.

Cash Advance Lenders vs. Traditional Lenders

Specific cash advance lenders are devoted to high risk lending. This means they extend loans to borrowers who would not otherwise qualify. They are prepared to see a high rate of default on these loans. To compensate for this high rate of default, the lenders charge very high interest rates across the board. Even if you are a low risk borrower, you will be assessed high fees to make up for the low credit scores of other borrowers. Instead of paying fees to subsidize the bad habits of other borrowers, use a traditional lender for your cash advance. Approach a bank to ask for the loan. A bank may be offering incentives as high as $500 to open a new account or new credit card. You may be able to get the cash advance without having to pay back the loan at all under unique circumstances.

Using Collateral for a Cash Advance

Using collateral can convince a traditional lender, even one that would not usually loan to a borrower with your credit score, to give you the cash advance. Since $500 is a relatively small loan for most banks, you will not need very sizable collateral. Your car will suffice, even if you do not own it out right. This is called an auto title loan, and it can be distributed even if you have a large lien on your automobile. If you do not own a car, try using a savings account or other asset for collateral on the loan. When you provide a lender with collateral, you are able to assure the lender you will not default. This makes any borrower, even one with bad credit, less risky in the eyes of the lender. The lower risk level is rewarded with lower rates.

Avoiding Late Fees on a Cash Advance

The main expense associated with cash advances is late fees. You will likely have to pay back the entire $500 in one lump sum. If you miss the payment or cannot pay it off in full, you will be assessed very high charges. This can often lead borrowers to take another cash advance, resulting in a costly debt cycle. To avoid this situation, take a loan that is only a fraction of your paycheck, instead of the value of your future paycheck. This way you can repay the loan sum, the interest fees and still have some wiggle room. Do not spend the money on anything else prior to repaying the debt.


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