The Terms and Conditions of a Same-Day Cash Advance

Same-day cash advances are used by many people in emergency situations. While the terms and conditions of all cash advances are slightly different, most of them have many things in common. Here are a few things that you can expect from most cash advances.

What is a Same-Day Cash Advance?

A same-day cash advance is a type of short-term loan. It is also sometimes referred to as a merchant loan, or payday loan. There are currently over 10,000 cash advance merchants in the United States and it is a rapidly growing industry. You apply for a loan and often get the money that you need deposited into your bank account within the same day.

The approval process of this type of loan is different from your traditional loans. With this type of loan, it typically does not depend on your credit history or credit score. They will approve you based on your ability to repay the loan. Most places will check to see if you have a job and do not have any previous outstanding loans. If you meet those criteria, you should be approved for the loan. Some cash advance merchants may require some form of collateral, such as a post-dated check, or a car title. However, many of them allow you to be approved on your employment status alone. This makes for a very simple application process that usually takes 10 to 15 minutes to complete.

Short Term

The majority of cash advances are set up to be very short term. For example, you may just be borrowing money until your next payday from work. Therefore, many payday loans only take place over a window of two weeks to one month. Others, may last one to four months, depending on the program that you sign up for.

Interest Rates

The interest rates charged by these companies is quite high when compared to any other type of loan. Since you are dealing with such a short loan term, it may not seem like you are paying that much. They may represent the interest on the loan as a total dollar figure for the two week period. Therefore, you are only paying $50 or $100 for the loan. Although it may be a small amount overall, it usually works out to over 250% APR. You are paying a very high rate of interest and this should be considered before making the decision to go ahead with the loan.

Fees

In addition to the high interest rates, cash advance lenders will often charge you several fees as well. They may charge you a setup fee, processing fee, or something to that effect on the front end. Then once you have the loan, they could charge other fees as well. For example, if you can not afford to repay the loan, they will charge you a fee to extend the loan. If you simply do not make the payment by the due date, the late fees will be very high as well. Many end up paying just as much in fees as the amount that they borrowed.


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