Have you ever felt the squeeze before payday? We’ve all been there, and those last few days before receiving your paycheck can feel like an eternity. Especially when you have niggling bills that need to get paid.
In these instances, a cash advance loan can really come in handy. Providing you with a small amount of money that is borrowed over the short term, an advance is a great choice if you need cash urgently.
If this is the first time you’re hearing about cash advance loans, don’t worry - we’ve got you covered. Keep reading to find out everything you need to know before applying for a cash advance.
A cash advance loan is a short term loan that is offered by lenders and credit card issuers. It is a type of personal finance that is taken out for relatively small amounts of money, and can be used to tide borrowers through to their next payday.
The main benefit of cash advance loans is the speed at which they can be issued. Most people who apply online are able to receive instant decisions and access the money they need faster than other loan products.
Cash advance loans are incredibly useful when you have expenses that need to be paid quickly. They are designed to cover financial emergencies - such as household appliance repairs, vehicle breakdowns or parking fines.
These advance cash loans are usually offered at smaller amounts, so they can’t be used for major, expensive costs. Generally speaking, cash advance loans are offered up to £1,000.
You should never use a cash advance loan for casual spending or non-emergency situations. By using a cash advance for non-essential purchases, you could end up in a cycle of debt - a place no one wants to be!
A cash advance loan works by providing the borrower with a small amount of money to repay over a short period of time. After being approved by the lender, you receive the advance upfront and start to make repayments after you receive your paycheck.
Because less money is borrowed, cash advance loan terms are short - usually the money is repaid in full between 3 - 12 months. The cash advance gets repaid at a pre-agreed interest rate set by the lender.
This personal finance solution provides lots of benefits to borrowers who need money to cover the short term. The main advantages of cash advance loans include:
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As with any type of loan, the major disadvantage of a cash advance loan is risk. You must be certain that you will be able to start paying the money back on your next payday, or you risk getting yourself into debt which can also negatively affect your credit score.
Cash advance loans tend to have higher interest rates and fees. The lender is essentially agreeing to provide fast access to small amounts of money on an unsecured basis, and they charge more interest to mitigate the increased risk.
These cash advance loans are ideal for people who need quick access to small amounts of money. However, they can be expensive, with higher interest rates than other loan products. Before applying for an advance cash loan, you should ask yourself the following:
A cash advance loan is relatively easy to secure, you just need to meet the lender’s specific requirements. Before applying for cash advance loans through ThisLender, check to see if you meet the qualifying criteria:
It depends. If you successfully pay back the cash advance loan on time, then this product will not damage your credit score. However, if you fail to meet repayments by the due dates, your credit score could be negatively impacted.
Before taking out a cash advance loan, you should check your credit file to better understand what lenders see when they analyse your application. Although the credit check makes up just one part of the application process, it can increase your chances of being approved at a lower rate.
When applying, it’s important to avoid providers offering instant cash advances online with no credit checks. It is a legal requirement for UK lenders to conduct credit checks before approving finance, so you should not go with a lender who skips this all important step.
The good news is that if you have bad credit you could still be eligible for a cash advance loan. When you apply online, you get access to a variety of lenders, some of whom are able to offer cash advance loans for bad credit.
If you need a cash advance but you’re worried about your credit score, it’s best to check your credit file before making an application. When applying for a bad credit cash advance, it’s important to understand that you may be charged higher interest rates, or be asked to find a guarantor to co-sign the agreement.
Lenders ask for guarantors as extra precaution and insurance that they will be able to get their money back in the event you default on repayments. The guarantor should be someone who you trust, such as a friend or family member. They must be willing to legally agree to take on your debt payments if you are unable to repay the money.
As one of the fastest loan products on the market, cash advance loans are usually able to be issued to your bank account within 10 minutes² after approval. Lenders offering this solution strive for quick access, which means you can expect to receive same day or next day funding.
Please be advised that each application is unique, so payout times will vary.
If you want to apply for a cash advance loan directly through a lender you can do so on your chosen lender’s website. However, before deciding on a lender it’s important to shop around and do your research.
All direct lenders offer different interest rates, charges and fees, and you want to make sure you are receiving the best deal possible to keep repayments at a low. Alternatively, you could choose to apply using an online loan matching service, like ThisLender.
As a broker, ThisLender is well placed to help you find competitive cash advance loans. We work with a panel of lenders who are authorised and regulated by the Financial Conduct Authority (FCA).
When you make an application through our website, we do our best to instantly match you to a suitable provider for your situation and needs. There’s no need to spend time and energy applying with different lenders, our loan matching technology searches a panel of lenders and presents you with an online tailored quote in minutes.
The quote you receive from ThisLender is no obligation, so you can change your mind anytime you like. After choosing a lender, you will finalise your cash advance loan offer directly with the lender.
The benefits of choosing ThisLender:
If you are having financial difficulties or need to speak to someone regarding your financial situation before applying for a loan you can get free and confidential advice from MoneyHelper (formerly The Money Advice Service), National Debtline or debt charity StepChange.
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Representative 49.9% APR
Representative example: Amount of credit: £1200 for 18 months at £90.46 per month. Total amount repayable of £1628.28 Interest: £428.28. Interest rate: 49.9% pa (variable). 49.9% APR Representative. Rates from 45.3% APR to 1721% APR - your no-obligation quote and APR will be based on your personal circumstances. The minimum repayment period for any loan will be 90 days from the date the loan is issued. The maximum repayment period is 3 years.
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