What Is A Cash Advance

Many cash advance loans dont require repayment in full at the end of the loan term. Instead, a borrower is often allowed to extend his loan, getting a new due date that corresponds with his very next pay check. For example, if the original due date was 3 March and the person is paid every other Friday, he may request to have his loan extended beyond 3 March to 17 March.  He wouldnt be able to wait until the 17th to pay any money, however. In most situations, he would have to pay a finance charge on 3 March for the privilege of extending his loan.

Even in a world where debit and credit cards have almost replaced cash, there are still some services and vendors which require immediate cash payments.  Taking out a personal loan for a relatively small amount of cash could prove expensive, while debit cards can only supply what currently exists in a savings or checking account.  During a cash emergency, such as paying the deductible on emergency dental work or a visit to the veterinarian, the best option may be to take out a cash advance against the balance of a credit card.

Some people may view cash advance loans as lifesavers because of the fact that they make it possible to obtain cash in as little as 24 hours time. Typically, they dont require a credit check which means that almost anyone can obtain one. All a person needs is a verifiable source of steady income, such as a job or social security and proof of identity.  Sometimes a checking account is required as well, as many cash advance lenders require borrowers to sign something allowing them to withdraw repayment money and finance charges from their bank accounts automatically.

Receiving a cash advance can simply be a matter of using a credit card at the nearest ATM.  Many electronic banking machines offer credit card users the option of a cash advance.  As long as the requested amount does not exceed the current cash advance limit, the ATM or other electronic banking machine should dispense real currency.  If the amount of the cash advance does exceed the current limit, the ATM may still dispense the money but also electronically flag the exchange.  An unauthorized cash advance might be handled in the same manner as a purchase over the credit limit.