3 Questions To Ask Before Taking Out A Cash Advance
A cash advance, also commonly referred to as a payday loan, is a short-term loan that's designed to help a person meet financial obligations before his or her next paycheck. A cash advance can be used for anything, but it's common for people to use them to cover emergency expenses, utility bills, and even rental payments. If you're thinking about taking out a cash advance, there are a few things you should ask your lender before you sign any paperwork.
Can the Loan Be Paid Off Early?
If you think you might be able to pay back your cash advance before the official due date, make sure you check with your lender to find out whether or not this is allowed. Typically, it is, but there are some lenders that may require you to stick to your repayment schedule; otherwise, pre-payment fees could apply. In other cases (and depending on your state's regulations), you might actually be entitled to receiving some of your loan fees back if you pay your cash advance back early enough; you'll also accrue less interest this way.
How and When Is Money Received?
You'll also want to make sure you have an idea as to how long it'll take for you to receive your funds after being approved for a cash advance, along with how your money will be transferred. Since cash advances are meant to be short-term loans, you should be able to get your money within just a couple of business days at the most. Furthermore, if your lender requires an ACH transfer for you to receive your loans, make sure you have your bank account and routing numbers available.
What Payment Options Are Available?
Finally, be sure that you're well aware of your payment options so that you can choose the one that will work best for you. A few common payment options for cash advances include:
- paying in full: You pay the entire balance of the loan (plus any applicable interest) on one due date
- partial payment: allows you to extend your payment due date; you pay a portion of your principal and interest, while the remainder is compounded onto a new loan
- interest-only payment: also allows you to extend your payment due date and requires you to pay only the interest accrued on your loan; the remaining balance extends onto a new loan balance with new loan terms and interest
For more information about payment options and the structure of a cash advance loan, contact a company like USA Cash Services.
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