4 Myths About Cash Advances

When you need funds fast, a cash advance could be a great choice. It's one of the fastest types of loans that you can take out, which is one of the reasons it's often used for financial emergencies or situations where people need quick cash.

But while cash advances are a popular type of loan, misconceptions abound surrounding this type of loan. There are plenty of myths out there surrounding cash advances and confusion around how they work.

In this article, we'll look at four common myths and separate fact from fiction.

Myth #1: You need good credit to get approved for a cash advance

One myth surrounding cash advances is that you need good credit to get approved. After all, for many loans, this is the case. Your credit score often has a big impact on the type of credit that you'll be eligible for. But with cash advances, that's simply not the case. It's usually relatively easy to get approved for one of these loans, even when your credit score may not qualify for other types of loans. All you need to do is head online and sign up, and you'll be able to know right away whether you qualify. Some lenders even offer same-day funding, which means you could get the funds in a matter of hours. They're that quick.

Myth #2: A cash advance will damage your credit score

Another myth about cash advances is that taking out a cash advance will damage your credit score. But simply taking out a cash advance may not directly impact your credit score. With a credit card cash advance, you could risk damaging your credit score if you use too much of your available credit, but it should not result in an additional hard credit pull, which might otherwise affect your credit score. Many online cash advance lenders do not perform a credit pull or otherwise report to the major credit bureaus, which means that taking a cash advance from those lenders should not have any impact on your credit score as long as you pay the loan in a timely manner. With a cash advance, failing to make the payments on time could damage your credit score, but of course, that is the case with any loan or form of credit.

Myth #3: You need a credit card for a cash advance

One way to take out a cash advance is by withdrawing the funds from an ATM. This can work if you already have a credit card, and it allows cash advances. But what if you don't have a credit card or don't want to risk using too much of your available credit? No worries! An online cash advance is another option and is a straightforward and easy way to access cash fast and, if the online cash advance lender does not perform a credit pull or report to the major credit bureaus, this may also reduce the risk of damaging your credit score by pushing your credit card balances too high.

Myth #4: You must apply for a cash advance at the bank

You can apply for a cash advance at the bank, but you don't have to. You can apply for a cash advance online as well. Once you're approved for an online cash advance, you can usually get the funds deposited directly into your bank account and can access them from there, making for a fast and secure transaction. It doesn't get much easier than that.

The Bottom Line

When you need cash in a hurry, a cash advance can be a good option, and it's certainly one of the fastest loans available. As with any loan, it's important to do your research and understand the facts about cash advances if you're thinking of taking them out. By paying attention to the terms and conditions, along with the interest rate and associated costs, you'll be able to make an informed decision and choose a loan that's the best option for you.