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Different types of cash advances
There are many different types of cash advance loans with a number of different features but the most common is a higher interest rate. These loan types are popular and are acquired with the use of a credit card.
Cash advances can also be defined as borrowing through a line of credit. Simply put, it is borrowing cash. This may be done by using a personal credit card and it is often possible to conveniently get a cash advance at ATM machines. Alternatively, some credit card companies give their customer checks, which can be deposited into a checking account or cashed. Advances are usually borrowed at a higher interest rate than for regular credit card use, with rates a few percentage points above the prime rate.
There are several types of cash advance lenders. It is quite easy to withdraw the money via an ATM, or you can provide a check.
The interest rate for these instant payday cash loans can be different from credit purchases, but monthly repayments are required in both cases. If you are making the minimum payment, cash advance lenders are regulated by federal law to apply lower interest rate on minimum payments. The interest rates and fees of cash advances may vary based on the policies and working procedures of the cash advance lender. It is good to understand the various features of the loan before borrowing the cash with your credit cards.
A payday loan is a common category of a cash advance loan with high-interest rates and fees. The cash advance lenders may provide loans between $100 and $100,000. The interest rates for the loan may exceed 100%. The borrower will have to pay back the short-term loan on his next payday. A post-dated check is provided to the lender when the borrower takes out the payday loan.
There are many payday loans companies which offer loans to help people cover expenses until their next paycheck. Fees and interest for these payday loans are usually higher than other types of loans, and people can expect to have to use quite a big chunk of their paycheck to repay the payday loan. Using payday loans may be a tricky issue for some as loan repayments and the high-interest rates can reduce paychecks so much that there is very little money for regular expenses, which may cause more loans to be taken out. Financial experts tend to recommend people to avoid payday loans because of their high costs of borrowing.
The employer is another alternative lender which can provide a cash advance loan. The interest rate and fee may vary depending on the policies of your company. You can borrow money from any one of the cash advance programs, but make sure to carefully read all important details, interest rates, and the other charges, especially if you have a bad credit history. For you to get the payday loan from your employer, you should be at least 18 years old and a legal resident of the United States. Your employer should have employed you for a minimum of 90 days, and you must have an active bank account to get the money directly deposited into your account.
Other types of online cash advances include the refund anticipation loan (RAL). Again, these loans charge high fees and interest rates and are disbursed based on the amount of money a person will get back in income taxes.