Getting quick cash when you have bad credit may seem appealing, but cash advances come with risks. This comprehensive guide will walk you through everything you need to know before getting a cash advance with poor credit.

What Are Cash Advances and How Do They Work?

Cash advances, also known as payday loans, are a type of short-term borrowing where you receive cash in exchange for a postdated check or electronic debit from your bank account. The lender does not check your credit score or report when approving these loans.

You can easily get approved for a cash advance of $100 to $1,000, even with bad credit. All you need is:

  • Proof of identity
  • Proof of income
  • Active checking account

The loan principal and fees are due to be repaid in full on your next pay date, usually within 14 to 30 days. If you cannot repay on time, the lender may offer to roll over the loan to a new due date for additional fees.

Cash advance lenders make money through fees, which are typically $15 to $30 per $100 borrowed. Due to these fees and short repayment term, the Annual Percentage Rate (APR) on cash advances averages 400%.

This high cost makes cash advances inappropriate for long-term borrowing. They should only be used for true emergencies.

Pros and Cons of Cash Advances

Pros:

  • Fast approval and funding, often within 24 hours
  • Minimal eligibility requirements
  • Accessible for people with no credit or bad credit

Cons:

  • Extremely high fees and interest rates
  • Must be repaid quickly in one lump sum
  • Very easy to get trapped in cycle of debt
  • Not a long-term financial solution
  • Penalties for late or missed payments

While convenient, the costs outweigh the benefits for most borrowers. Consider all alternatives before choosing a cash advance.

What To Expect With Cash Advance Terms and Fees

The specific terms and fees for cash advances can vary by state laws and lender policies. However, there are some typical costs to expect:

  • Loan amount: Usually $100 to $1,000. Some lenders may offer up to $2,500.
  • Term length: Commonly 14 to 30 days. Some states allow terms up to 60 or 90 days.
  • Finance charge: Average $15 to $30 per $100 borrowed. This equates to 400% APR.
  • Application fee: May range from $5 to $75 per loan.
  • Late fees: Typically 5% to 10% of the unpaid balance after the due date.
  • Non-sufficient funds (NSF) fees: $15 to $35 if automatic withdrawal attempt fails.

Always read the full loan agreement carefully so you understand the exact fees for a given lender before accepting funds.

alternatives To High-Cost Cash Advances

The steep fees make cash advances a very expensive way to borrow money. Before applying, exhaust all alternatives, including:

  • Borrowing from family or friends
  • Receiving an advance on your paycheck from your employer
  • Using a credit card or personal line of credit
  • Taking out a lower-interest personal loan
  • Applying for government or nonprofit assistance programs
  • Cutting back expenses temporarily
  • Working overtime or getting a side gig

If these options are unavailable, seek the cash advance with the lowest advertised fees. Comparison shop between multiple lenders.

Tips for Responsible Usage

Cash advances should only be used for absolute necessities and when no lower cost alternatives exist. Follow these tips to use them responsibly:

  • Borrow only as much as you can repay with your next check.
  • Carefully track the repayment due date and have the full funds ready.
  • Do not accept offers to roll over the loan – repay in full on time.
  • Avoid taking concurrent loans from multiple lenders.
  • Have a Plan B (e.g. friends, family) in case you cannot repay.
  • Get on a written budget to avoid future shortfalls.
  • Begin rebuilding your credit to qualify for less expensive financial products.

With discipline and a solid repayment plan, a cash advance can provide temporary relief. But frequent use or failure to repay can lead to a dangerous debt spiral.

Frequently Asked Questions

Q: How can I get a cash advance with bad credit?

A: Most lenders offering cash advances do not check credit reports. You just need to provide proof of identity, income, and an active checking account.

Q: Where can I get cash advances?

A: You can apply for cash advances online or at physical lending store locations. Rates from online lenders tend to be lower.

Q: What if I can’t repay my cash advance on time?

A: Contact the lender immediately before the due date and ask if they offer any grace period or installment plan options. Be prepared for steep late fees.

Q: How many cash advances can I have at once?

A: It’s best not to take out multiple concurrent cash advances. This makes repayment extremely difficult and expensive. Manage your finances to avoid needing stacking loans.

Q: Can a cash advance hurt my credit?

A: If you fail to repay on time, the lender can send the unpaid debt to collections which will generate negative entries on your credit reports. Late fees also add substantial costs.

Key Takeaways

  • Cash advances provide fast cash without a credit check but carry fees much higher than most other lending options.
  • Only use cash advances for true emergencies when no cheaper alternatives are available.
  • Have a realistic plan to repay the full balance on the exact due date in order to avoid damaging roll over loans or late fees.
  • Improving your credit health in the long-term will open up cheaper borrowing options going forward.# Getting a Cash Advance With Bad Credit – What You Need to Know (Continued)

…Key Takeaways

  • Cash advances provide fast cash without a credit check but carry fees much higher than most other lending options.
  • Only use cash advances for true emergencies when no cheaper alternatives are available.
  • Have a realistic plan to repay the full balance on the exact due date in order to avoid damaging roll over loans or late fees.
  • Improving your credit health in the long-term will open up cheaper borrowing options going forward.

Assessing Whether You Actually Need a Cash Advance

With their ultra-high fees, cash advances should only be used as an absolute last resort. Before applying, carefully consider whether you have exhausted all other options, including:

  • Requesting due date extensions or payment plans from current creditors
  • Asking for a paycheck advance from your employer
  • Temporary side jobs for extra income
  • Cutting any non-essential spending until payday
  • Borrowing reasonably from friends or family
  • Seeking aid from charitable organizations if facing hardship

If these are truly unavailable, assess whether the need justifies a cash advance’s high costs or if cutting costs further is possible. Only borrow the minimum amount absolutely needed.

Have a realistic written budget to demonstrate your ability to repay it in full on time. Cash advances should only bridge unavoidable short-term income gaps – not fund unnecessary purchases or entertainment.

Steps for Getting Approved

If you have determined a cash advance is unavoidable, follow these steps to get approved:

  • Research lenders – Compare interest rates and fees across multiple online lenders. Avoid lenders with vague fee disclosures.
  • Gather required documents – You’ll need a government ID, recent paystubs, and bank account info.
  • Complete the application – Applications take 5-10 minutes online or in-store. Approval is often instant.
  • Accept loan terms – Carefully review the loan agreement sent and verify you understand all fees before signing.
  • Get the cash – Funds are deposited directly into your bank account or loaded onto a prepaid card.
  • Mark repayment date – Note the exact due date for full repayment. Set reminders to avoid late fees.
  • Have funds ready – Make certain the full balance for principal, fees and interest is in your account by the due date.

Following these steps will help ensure you get the lowest rate and smoothly receive the funds. But remember – only proceed if absolutely necessary and you can repay on time.

What to Do If You Can’t Repay on Time

Despite best efforts, unexpected situations could leave you unable to fully repay your cash advance by the due date. If this happens, take these steps immediately:

  • Contact the lender – Explain the situation and request an extended due date or payment plan. There may be options to avoid default or late fees.
  • Avoid further defaults – Do not take out additional cash advances that worsen repayment ability. Stop using the account.
  • Pay whatever you can – Making the minimum or partial payment shows good faith while you get back on your feet.
  • Get help – Turn to family/friends or credit counseling agencies if unable to cover basic expenses.
  • Prioritize essentials – Housing, food, utilities and transportation come before repaying debts.
  • Build savings – Going forward, even small amounts to an emergency fund will help weather income disruptions.

With proactive communication and strategic budgeting, short-term cash flow challenges need not morph into long-term debt burdens. The key is avoiding a downward spiral of late fees and multiple loans.

Samuel Mitchell