The Pros and Cons of a Cash Advance Loan

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About 33% of Americans now use cash advance apps.

You never know what life is going to through at you, and at some point, you might find yourself in a financial pinch. It’s good to have an emergency fund saved up, but if you need to get your hands on some money fast, a cash advance loan could be the best solution. They’re more widely available now than ever before, and easy for anyone to get.

In this guide, we’ll cover the basics of a cash advance loan, as well as the pros and cons of getting one. Keep reading for more.

What Is a Cash Advance Loan?

A cash advance loan is a loan that you can take out quickly and easily. You can find them from online lenders, and they’re a great solution if you need cash fast.

When compared to traditional loans that banks offer, cash advance loans are often a lot smaller. They tend to also have shorter terms, so they need to be paid back relatively quickly.

People usually get these loans when they need a sum of cash but don’t have the time to go through a standard loan application. At First Financial, we offer loans of up to $5,000, and you can have the money in your account in under 24 hours.

Pros of a Cash Advance

Cash advances have become very popular in recent years. Depending on your current situation, there are various benefits that could make a cash advance loan an ideal choice.

Fast Cash

The main benefit of a cash advance loan is that you can get the money you need fast. This is the main reason people tend to use them, and in most cases, you’ll get your money within a day of applying. A regular loan can take weeks or even months, so this is a much better solution if you need cash immediately.

No Credit Check Needed

This is another key reason that people go for cash advance loans. When requesting a loan from a bank or credit card issuer, they’ll want to do a credit check.

Not only will this affect your credit score, but they’ll expect your score to be a certain level. If it’s not high enough, they won’t approve your loan.

If you already have a low credit score, the last thing you need is to lower it further. Cash advance loans are less stringent, so they’re far more accessible to most people, and applying for one doesn’t harm your credit score.

Low Requirements

On top of your credit score, traditional lenders will have various expectations and checks before approving your loan. This often includes things like:

  • Your net worth
  • Your yearly income
  • Collateral for the loan
  • Origination fees
  • Employer and income verification
  • DTI (debt-to-income) ratio

When getting a cash advance loan, there are far fewer requirements. These can vary depending on the lender, and at First Financial, you just need a source of income (at least $800 a month), a bank account, and a valid email address. There’s no credit score requirement, so you just need to give us these details when you apply and we can get to work on sending you your loan.

Can Get You Out of a Jam

Some people apply for cash advance loans for things like holidays or cars so they can quickly get the money they need. Another reason, however, is for something unexpected.

If you suddenly have issues with your car, or an appliance in your home breaks, for example, you might not have the cash on hand to deal with things. You can take out a cash advance loan to pay for any repairs or other issues straight away, which could be ideal in a difficult situation.

Cons of a Cash Advance

While there are several benefits to cash advances, they are also some downsides. It’s important to consider these when looking at different loan options.

High APR

Perhaps the biggest disadvantage of cash advance loans is that they generally come with a higher APR (annual percentage rate) than other types of loans. These can vary a lot for all kinds of loans, so make sure you take a look at the details of the different choices available so you know what they are.

No Rewards

When using your credit card, there are various rewards that you might be able to get. This includes things like points, air miles, or cash. Credit works similarly to a loan, but often comes with bonuses like these.

When getting a loan, you’ll miss out on these extras. It’s worth remembering, however, that these credit card rewards aren’t the reason you’re applying for a loan in the first place, so they shouldn’t have a huge impact on your decision.

Interest Is Added Immediately

Depending on the options available, some loans won’t add interest from the start. With cash advance loans, however, interest is immediately applied. This is part of the tradeoff of being able to get access to your money so fast.

Finding the Right Cash Advance Loan for You

They’re not perfect, but a cash advance loan can be incredibly helpful. If you need cash fast, have a poor credit score, or don’t want to go through a standard loan application, a cash advance is a great solution.

First Financial offers cash advance loans to anyone that meets our basic requirements. You can apply for up to $5,000 and may be able to access the loan within 24 hours of your application. There’s no credit check—you just need to give us some basic details and we’ll be able to transfer the loan to your bank account.

Take a look at our Cash Advance page to see more details today.

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