Ever run into a sticky situation where you don’t have quite enough cash to cover your expenses? Cash advance loans can help you pay off your bills so you avoid a missed payment on your credit report.
Not all cash advance loans are safe or affordable, so it’s important to do your research and choose the right cash advance option available to you.
What’s a Cash Advance?
A cash advance is a short-term unsecured loan that you can get to cover bills, fees or fines without using credit. Cash advance providers usually charge fees and/or interest on loans and there’s usually a limit to how much you can borrow.
You might have heard about getting cash advances through a credit card at an ATM — as long as you have a personal identification number (PIN). You can also take your credit card to a bank that offers advances through your card’s payment network.
How Do Cash Advances Work?
How do cash advances work, anyway? Here’s how to get one.
Step 1: Research Reputable Cash Advance Services
Cash advances aren’t the same thing as payday loans, though many people confuse the two. A payday loan charges high fees and sometimes up to 700% interest.
Cash advances come through your bank — not a potentially shady lender. Before you think about getting an advance, make sure your servicer has a good reputation and low interest rates.
Step 2: Understand the Limits
Your provider or bank might have limits on how much money you can borrow with a cash advance. Electronically submit a pay stub as proof of your income and find out how much you’re eligible to borrow.
Step 3: Learn about Fees and Interest Rates
Do some research on the cash advance fees you’ll incur on the amount of money you need to borrow. Also, find out about interest rates and any other fees that you have to pay when you take out an advance.
Some banks don’t charge high fees or interest, while others charge high rates and fees!
Step 4: Connect With Your Bank
Cash advances aren’t secured with cash — so your bank will need a way to ensure that you have enough money coming in to pay off what you borrow. There may be other types of verification you need to complete before you can get your advance.
Every bank has its own requirements, so follow your bank’s steps closely for your best chance of getting your cash advance.
Step 5: Wait For Your Bank to Confirm Your Account
After you connect with your bank and begin the process of confirming your account, you might need to wait while your bank verifies your income. For example, you might need to wait for one or two deposits to settle in your account before you’re eligible for a cash advance.
These steps vary by bank. Learn more about what your bank’s processes are ahead of time so you know what to expect.
Step 6: Submit a Request For a Cash Advance
Submit a request for a cash advance through your bank’s online portal or submit a request through your bank’s app.
Step 7: Get Your Money
After you’ve submitted your request, wait for the lender to give you approval. This step isn’t required for some banks. At MoneyLion, you’ll see your cash instantly deposited into your account after you submit your request.
Is a Cash Advance a Payday Loan?
No! Many people make the mistake of confusing cash advances with predatory payday loans. Not knowing the difference between the two can cost you a lot of cash.
The differences between payday loans and cash advances often boil down to fees and interest. It’s not uncommon for payday loans to have interest rates of between 300% per year at the lowest to 790% or higher for borrowers with bad credit.
High APRs mean that payday loans are notoriously hard to pay back.
For example, let’s say that you take out a payday loan for $500 — but that loan also has a $50 fee and an APR of 300%. This means that every month, your loan accrues $125 in interest — that’s a little over $4.12 a day. If you take that loan out for just 14 days, you’ll end up paying a grand total of $107.68 in fees — $57.68 in interest and your original $50 flat fee.
When it’s time to pay back your loan, you’ll owe over $607.
Cash advances are different than payday loans because they don’t take advantage of you. MoneyLion offers $250 in a cash advance instantly — with 0% APR and no fees.
Always make sure that you choose a cash advance and not a payday loan. And always remember to work with a trustworthy bank or credit union like MoneyLion when you get your advance.
What You Should Look for in a Cash Advance Service
In addition, look for these key qualities in your cash advance service.
Chances are, you don’t have time to sit around and wait for an application to clear when you need a cash advance. Look for a bank that gets you your money fast.
You also may not have time to run to the bank to deposit cash. Look for a cash advance service that deposits your money directly into your checking account.
High interest rates can seriously affect your ability to pay back your cash advance. Save money by looking for a provider that offers a reasonable APR. Do the math and figure out how much you’ll end up paying after two weeks on the amount of money you need.
Some cash advance services even offer 0% APRs, like MoneyLion Instacash advances, so don’t be afraid to shop around before you choose a cash advance service.
Just like your APR, advance fees can make your loan much costlier. Ask your advance provider about fees and look for a provider who only charges a small fee — or better yet, no fee at all.
No impact on your credit
One of the benefits of a cash advance is that it won’t impact your credit if you pay it back on time. Avoid banks that require a hard check on your credit. Every time a company pulls your credit report, your score lowers — so protect yourself by choosing a bank that doesn’t mess with your credit score.
Steps to Get an Online Cash Advance with MoneyLion
You can get up to $250 in a cash advance with no fees and 0% APR through MoneyLion Instacash with just a few steps.
Step 1: Open an account with MoneyLion
Open an account with MoneyLion. Download the MoneyLion app from the Apple App or Google Play store onto your phone and follow the in-app instructions to open a free MoneyLion membership.
You’ll need to provide some basic personal information, including your name, phone number, current address and Social Security number to open an account.
You’ll also need to prove your identity before you can open an account. A state driver’s license, passport, military ID or state-issued ID card are all valid forms of personal identification.
Step 2: Qualify for Instacash
Join Credit Builder Plus, link your checking account, or sign up for MoneyLion Checking with a direct deposit of $250 or more through your MoneyLion app — just follow the steps provided. Alternatively, you can log into your HR or employee website and set up direct deposit there.
Step 3: Navigate to the “Finances” tab
In the MoneyLion app, you’ll see a tab labeled “Finances” on the bottom of your screen. Click on it, then tap the button labeled “Instacash.”
Step 4: Select how much money you need
Depending on how much money you have coming in per pay period, you can immediately get up to $250 in Instacash cash advances. Select the amount of money that you need and confirm your transaction.
Step 5: Use your money!
As soon as you’ve confirmed your Instacash amount, you’ll see the money appear in your MoneyLion checking account.
Get Cash Safely When You Need It Most
Have a bill looming over your head? MoneyLion offers a unique type of instant cash advance you can use to cover unexpected bills before your next paycheck arrives.
The best part? It’s way more affordable than most other cash advance loan providers, with 0% APR, no fees and no need to schedule a trip to the bank when it’s time to pay back your advance.
Use your Instacash cash advance to get your finances back on track and avoid taking a hit to your credit score. MoneyLion’s Instacash option is far superior to most online cash advance options, so open an account with MoneyLion today.