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How do I Choose the Best Cash Advance?

There are risks to many cash advance options.
Cash advances often require a recent pay stub.
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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 27 October 2014
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A cash advance loan can also be known as a payday loan, paycheck loan or bad credit lending. It is typically a loan offered by companies that base their ability to lend money on the fact that a borrower has a steady income, which they can verify with a pay stub. There are numerous lenders that offer cash advances, but these are not the only options. For instance, some employers may also possess the ability to lend money to a worker.

Choosing the best cash advance loan, as offered by a private lender can take some consideration. Generally, the upside of these loans is that it is possible to obtain money fairly quickly. Some can approve applications in a few hours, while others may take a day or two. How fast a person requires money may be a consideration when trying to obtain a loan.

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Some online companies accept one application and then match people with various lending offers. This may be a good way to find the best cash advance offer since it allows people to compare interest rates and/or fees that they may need to pay. The disadvantage of cash advance loans is that they do charge high interest rates, some will take up to 30% of the advance in fees, and even the lowest fees may be about 10% of the total advance. This is considered high because most advances are for a short duration, and if the person is somehow unable to pay back the loan immediately, they can expect more fees and additional interest charges.

It’s therefore important to look for lenders with the lowest fees, and a company that can give people numerous offers with one application has an advantage here. With the various offers, the borrower can determine which one will cost the least. The other method for finding this information out is to look at several paycheck lending companies online or locally, to determine which ones have lowest fees. There are paycheck loan shops in lots of local communities, in addition to the many located online.

When consumers do their own homework and compare lending offers, they may get the best interest rate, but some people are in a rush and need money right away. Lenders may vary in the speed at which they can process an application and get cash to the borrower. Another point of comparison is how soon the cash advance will arrive in a person’s bank account, and sometimes people define the best cash advance as the one they can get soonest.

Many online companies can operate very rapidly, approving an application for a cash advance in a matter of minutes. However, it can still take a day or two for money wired into a bank account to show up. Sometimes local paycheck loan companies have the advantage because they may be able to offer money right away, though this varies.

Once people decide on the best cash advance offer, they should take a few moments to do some research to make certain the offer is legitimate. A good place to look is the Better Business Bureau, to check the reliability of the company and see if there are any complaints lodged against it. People are also advised to attempt to limit obtaining paycheck advances, as this can become a vicious cycle, where the high fees repaid necessitate new advances, and the amount of a paycheck a person keeps gets smaller and smaller as more loans are taken.

Given the high fees associated with most paycheck loan services, people really should consider other options, which really may be the best cash advance methods. If they can get a paycheck advance from an employer, they probably will pay no interest. Another option is to ask for a personal loan from a family member or friend, with agreement the loan will be repaid immediately upon receiving a paycheck. Others might be able to request a credit limit increase on a credit card, and this may only take a few minutes too.

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