The best cash advance loan for you will largely depend on your specific financial situation. The two most common types of cash advance loans are credit card cash advances and payday loans. But make sure you know how each of these works before choosing one. They each have their own set of terms and conditions, and their interest rates may be high compared to other types of quick cash options.
“Cash advance” is a term that can encompass several different financial products. Make sure you know the differences between them before you choose which one is right for you. Always compare the terms, conditions, and especially the interest rates.
Credit Card Cash Advance
A credit card cash advance means using your credit card to take out cash, instead of using your checking account. You can often do this at an ATM, or online by transferring money from your credit account to your checking account. Many credit card companies may offer this option, but it usually comes with very high interest rates.
Normal credit card purchases don’t usually start accruing interest right away. There’s typically a “grace period” after a purchase, which is just a set amount of time when interest won’t accrue. But credit card cash advances don’t normally have a grace period. This means that as soon as you withdraw your cash the interest will also be added to your overall balance. These are good reasons to avoid credit card cash advances if possible.
Payday Cash Advance Loans
A cash advance loan on the other hand is just another name for a payday loan. A payday loan is a short-term, high-cost loan that borrowers use to stretch their finances to their next payday. Usually, payday loans only offer small amounts, ranging up to a few hundred dollars on average. They also need to be repaid rather quickly, usually within two weeks.
Depending on the lender, the interest rates for payday loans tend to be very high. This makes them difficult to repay when combined with short repayment periods.
If you have other options like personal installment loans, bank loans, or credit union loans, it’s wise to consider those before choosing a payday cash advance loan or a credit card cash advance.