Not everyone can afford to pay for emergency expenses. Fortunately, there are many ways to borrow money online, and one of those ways is to get a cash advance loan. Cash advance loans can help you in financial emergencies.

This loan is versatile. You can use this loan for anything, such as medical bills, car repairs, house repairs, and many more. However, before you get a cash advance loan, it is important to know what it is and how to get it online.

What is a cash advance loan?

A cash advance is a short-term loan. For cardholders, the bank will allow the customer to withdraw a certain amount of cash from their credit cards. For employees, they will allow their employees to borrow from their paycheck. Generally, it provides borrowers an amount before their payday.

Unfortunately, getting a cash advance loan from a bank is not easy, especially if you have a low credit score. Even if you have a good credit score, it can take a few weeks before the funds will be released. Now, you can get cash advances online. Advancements in technology are allowing people to easily get help covering emergency expenses.

However, do not mistake a cash advance loan for a payday loan. On the latter, you are expected to pay it before your paycheck arrives, or else your paycheck will be reduced. With the former, there is a short-term installment plan that has a set repayment schedule. The repayment time frame is longer than a payday loan but shorter than other loans. 

Types of cash advance loans

Here are different types of cash advance loans:

Credit card cash advance

This is the most popular type of cash advance loan. The money can be withdrawn from an ATM, depending on the credit card company. Credit card cash advance loans usually have higher interest rates compared to other cash advance loans and can be higher than other purchase rates. Furthermore, the interest will accrue as soon as possible without any grace period.

This type of cash advance loan usually includes a fee other than the interest, either a percentage of the amount borrowed or a flat rate. Moreover, you will be charged a usage fee if you get the cash from an ATM. Nevertheless, this loan is quick to obtain.

Merchant cash advance

This type of cash advance loan is obtained by merchants and companies from lending and financing institutions. Entrepreneurs often take out this loan to fund their business ventures.

Mostly, contracts for payment include a condition that a portion of the profit will be used as payment for the loan. However, most lenders check the company or entrepreneur’s creditworthiness through various online accounts and data points. The lenders will also check whether the merchant receives payment online or through cheques.

Online cash advance loan

This is the rising trend for cash advance loans. Basically, the loan is taken out online with just a few clicks of a button. The borrower only needs to fill in some documents and wait for approval. Once approved, the money will be deposited directly into their bank accounts.

How online cash advance loan works

You might wonder how an online lender will provide a cash advance. And no, the computer will not spit out money from the screen. The amount will be deposited into your bank account after obtaining approval.

You do not have to go to the physical office of a lender. With the situation right now, everything is done online, even online lending. The entire process is done via the internet. Instead of filling out lengthy paper forms, you only need to complete an online application and be informed of your application status online. The money is electronically transferred to your account.

When getting an online cash advance loan, the first thing you should do is to check your eligibility. Once you submit your application form, the lender will contact you whether you are eligible for a cash advance or not.

Second, once you are eligible, you should read the terms and conditions of your cash advance agreement. This document will show you the repayment plan, including the date of payment, monthly payment rate, and other conditions for payment. If you agree to the terms and conditions, sign and send it to the lender.

Lastly, wait for the money to be wired to you. Once received, use it for the purpose you got it for. Typically, online cash advance loans are short-term. Thus, you need to repay in installment during that period.

Takeaway

Emergency expenses are inevitable. You might have no other ways to pay for such expenses except through taking out a loan. Other loans might be too burdensome and long-term for you. Fortunately, cash advance loans are short-term. Furthermore, the process of borrowing is now easier because you can take out this loan online.