What are Cash Advances Exactly?

By Brown Ezilon.com Articles Published 06/5/2011 | Cash Advances

Cash advances are in fact loans for small amounts of money that can be borrowed by loaning companies only for very short periods of time. The limit of these cash advances is usually less or equivalent to 1500. These cash advances are usually quite simple to obtain as loaning companies will not run credit checks for those requesting these kinds of loans, thus making it easier for those with bad credits to obtain a loan. Paper work is less and works faster than any other type of long term loan, but the interest rates are higher and the term very short, usually less than a month.

Loaning companies that provide this sort of cash advance loan are also called payday loans as they are usually reimbursed on your next paycheck day. These loaning companies that provide fast cash advances are usually all privately owned, which are in turn owned by banks or other financial institutions. This means that although you may go to a small private loaning business, behind this business there will always be a larger financial institution.

You may also be able to obtain cash advances in pawn shops that also offer this service in exchange of guarantees or collateral. Although you will find that the collateral pawn shops require will in most cases be more than the value of the loan they will be giving you.

Usually people seeking a cash advance loan are those that have an emergency expense that needs to be taken care immediately and cannot wait until the end of the month when their pay check comes through. In most cases those who are able to obtain these cash advances can usually pay them back in the given period and fully.

These loans are in most cases handed out in the form of cash are given in return for a post-dated check in the amount of the loan including interest. This means that the loan is paid back automatically on the date that has been established by the loaning company. The post-dated check is a guarantee that the payment will be made at a certain date. Of course the borrowing party will have to make sure there are sufficient funds to cover the check at the moment the loaning company cashes the check.

These cash advances should really only be an emergency option for the interest rates are high and the time you have to pay back the loan is restricted. Interest rates can be up to twenty percent depending on the company, but you can negotiate with them if you shop around a bit before you decide on a particular option or loaning company.