At some point in life, we face a situation when we run out of our bank balances before our next paycheck is credited to our account. There might be some emergencies or a sudden financial crisis which makes the need of money indispensable for us. In such scenarios going for a cash advance is the best option and people nowadays prefer it over any traditional loans available. There are many reasons behind it and in this article, we list down the top five reasons why people use cash advances
1. It’s easy and quick
Unlike other loan options, a cash advance is easy and quick to obtain. It needs to credit check and is less cumbersome to get. When you need money immediately then a cash advance is considered as one of the quickest options as it credits you with the amount within a day.
2. No credit check
Let’s say you already have two to three loans and have missed on the timely payments of their installments. In such case, your credit score might not appear good enough to qualify you for another loan. With a cash advance, you can overcome such issues as it doesn’t do a credit check on your credit history. It’s solely based on your ability to repay the amount to the lender using the next payment you are going to get. This makes it easy for people who have a poor credit score and otherwise would have paid more interest rates to the lender as sometimes few lenders decide rates based on credit scores. The cash advance loans involve less paperwork and thus makes the entire process easy for the seeker.
3. Better for short-term crisis
Usually, cash advance options are taken to come out of the financial burden. Thus, a person taking cash advance can utilize the amount as an opportunity to reorganize his finances using the extra money he has with a cash advance. For example, the money can be paid to clear an overdue payment or buying something important, paying an unexpected bill or so. Such expenditures don’t come often in long-term but it makes the person cautious enough to understand the value of savings and plan better for the future.
4. Reasonable interest rates
Due to the fairly large number of companies giving cash advances these days, interest rates are not very high and makes it a preferable option. Additionally, there are no strict late payment penalties because the repayment is based on the upcoming payment of an individual. So there is no risk to your property or any secured item which is present on traditional loan options or line of credit.
5. Higher chances of approval
Every lender is curious to know the reason behind loan application as they are interested in getting their money back without any hassles. While with other loans you need to have a compelling reason for seeking a loan, with a cash advance you don’t really need to justify your need for money to the lending company. The lending company might just ask you the statement of your income to be sure that you can repay them for your credits in future. Thus, the chances of rejection of cash advances are minimal.
Due to all above factors, people prefer a cash advance option. However, before you take a cash advance you must be sure that you have a plan to properly come out of the financial crisis you are in. Don’t fall into the debt cycle and end up in the same situation again. Taking a cash advance should be used as an opportunity to resettle financially and live a stress-free life.