A cash advance loan or payday loan is a short term loan that is becoming popular with people who have bad credit. Cash advance lenders are confident to offer this type of loan to people with credit problems because the risk is low since the loan will be repaid on the borrower’s next payday schedule.
If you are one of those people with bad credit, this type of loan would be your best option. However, like any other loan available in the market, a cash advance loan also has some requirements that you must meet, such as:
Stable source of income
Having a stable source of income is one of the reasons lenders see less risk in offering cash advance loans to borrowers with bad credit. You must provide proof of income to the lender before they can decide whether or not to approve your application.
A cash advance loan is like taking your next payday up front, but with additional interest. There are times when we need the cash quickly, but your payroll schedule is still a long way off. The concept of a cash advance loan is to provide instant liquidity to employees who are in need of cash but who have been unable to acquire installment loans due to special circumstances.
This is why a cash advance loan is also called a payday loan because your next payday will be the payment of the entire loan amount you owe plus interest. If you don’t have a stable income, payday lenders will likely deny your application.
If you are one of the 45 million Americans without a score, you should strongly consider taking out a cash advance loan if you have a stable and good income which can qualify you for this loan option.
Current account active
Another thing that you must have is an active checking account. The lender will ask for a dated check for your next payday schedule as an essential requirement for a cash advance loan. The check will serve as collateral from the lender.
Once you receive your paycheck on the due date of payday, you can pay the lender in cash and have your check issued. You can also choose to deposit your payment into your checking account so that the lender can cash it.
Proof of identity
After providing the above mentioned requirements, the next thing the lender will ask you for is proof of identity. This requirement will prove that you are who you say you are. Proof of identity is an essential requirement not only for loan applications but for other things as well.
You need to know which proof of identity the payday lender will accept, as some lenders are particular to what they consider to be valid proof of identity. The identification you will provide to the lender should include your full name, date of birth and address.
You must be at least 18 years old.
The cash advance loan or any other loan available is reserved for people aged 18 and over. 18 is the legal age set by most states in the United States, which means that a person must be at least 18 to take legal action, including applying for a loan.
Eighteen is also the youngest age a person with a stable income can be. Although some younger teens in the United States are already working, this cannot be considered stable employment. It might just be a part-time job with a low salary.
Something else you should know about payday loans
Aside from the requirements to qualify for a cash advance loan, there are additional things that you need to know about this loan option. A cash advance loan does not have a direct impact on your credit score, but it can still indirectly.
Once you get a cash advance loan, you will have to pay a high rate of interest, which will affect your other financial obligations such as existing debts, bills, and even your daily needs.
If you think that you can afford to pay the interest rate on the cash advance loan without affecting your other obligations, then you shouldn’t be concerned. You should also know about cash advance loans which might even entice you to acquire one as it is a quick and easy solution to your financial problems.
There is no request or subscription involved in a cash advance loan. It also gives the money as soon as you meet all the conditions and qualify for the loan. It is one of the fastest short term loans available in the market today which can help many people who are in need of additional funds.
There are so many great things about cash advance loans, but you should also understand that there is a downside just like any other loan. Cash advances or payday lenders don’t give their borrowers a grace period. The interest rate on your cash advance begins to accrue from day one.
However, you will be informed by the lender about this as it will be included in their policy. If that’s okay with you, go ahead and apply for a cash advance loan from the payday lender near you.
In a word
Having a low credit score doesn’t mean you can’t do anything to acquire extra cash when you need it. A cash advance loan is made available to the public so that people who have a bad credit reputation can always get help, especially in an emergency.