A cash advance loan or a payday loan is a short-term loan that is becoming popular with individuals who have a bad credit score. Cash advance lenders are confident to offer this loan type to flawed credit individuals because the risk is low since the loan will be paid on the borrower's next payday schedule.
If you are one of the people suffering from a bad credit score, then this loan type would be your best option. However, just like any other loan available in the market, a cash advance loan also has requirements that you must provide, such as:
Stable Source of Income
Having a stable income source is one reason lenders see lower risk in offering cash advance loans to bad credit borrowers. You must provide proof of income to the lender before they can decide whether to approve your application or not.
Having a stable income source is one reason lenders see lower risk in offering cash advance loans to bad credit borrowers.
A cash advance loan is like taking your upcoming salary in advance but with an added interest. There are times that we need fast cash, but your payday schedule is still far away. The concept of a cash advance loan is to provide instant cash to employees who need money but could not acquire installment loans due to particular 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 owed plus the interest. If you do not have a stable income, the payday lenders will likely deny your application.
If you are one of the 45 million Americans without a score, you should highly consider taking out a cash advance loan if you have a good and stable income that can qualify you for this loan option.
Active Checking Account
Another thing you must have is an active checking account. The lender will request a check dated on your next payday schedule as an essential requirement for a cash advance loan. The check will serve as a security on the part of the lender.
Once you receive your salary on your expected payday date, you can pay the lender in cash and take your issued check. You can also opt to deposit your payment to your checking account so that the lender can cash it.
Proof of Identity
After providing the requirements mentioned above, the lender's next thing will ask from you is proof of identity. This requirement will prove that you are who you say you are. Proof of identification is an essential requirement not only for loan applications but also for other things.
You must know what proof of identity the payday lender will accept, as some lenders are particular to what they consider valid proof of identity. The identification that you will provide the lender should specify your complete name, birth date, and address.
You Must Be at Least 18 Years Old.
Cash advance loan or any other loans available are only for individuals who are 18 years old and above. 18 years old is the legal age set by most states in the US which means that a person should be at least 18 years old to carry out legal actions including applying for a loan.
Eighteen years old is also the youngest age a person with a stable income can be. Although some younger teenagers in the US are already working, it cannot be considered a stable job. It might just be a part-time job with small pay.
Other Thing You Must Know About Payday Loans
Aside from the requirements to qualify for a cash advance loan, there are additional things you should know about this loan option. A cash advance loan does not directly impact your credit score, but it still can indirectly.
Once you acquire a cash advance loan, you will need to pay a high-interest rate, affecting your other financial obligations such as existing debts, bills, and even your daily necessities.
If you think you can afford to pay the cash advance loan interest rate without it affecting your other obligations, then you should not be worried about it. You must also know about cash advance loans that might even tempt you in acquiring one because it is a straightforward and quick fix to your financial problems.
There are no applications or underwriting involved in a cash advance loan. It also gives the money as soon as you provide all the requirements and qualify for the loan. It is one of the quickest short-term loans available in the market today that can help a lot of people who need extra funds.
There are so many good things about cash advance loans, but you must also understand that there is a downside, just like any other loan. Cash advance or payday lenders do not give their borrowers a grace period. Your cash advance loan's interest rate starts accruing on day one.
However, you will be informed by the lender about this as this will be included in their policy. If this is okay with you, then proceed and apply for a cash advance loan to the payday lender near you.
In a Nutshell
Having a low credit score does not mean that you can not do anything to acquire extra cash when you need it. A cash advance loan is made available for the public so that individuals who have a not-so-good credit reputation can still get help, especially in emergencies.