General Information

Cash advances, payday loans, and other financial terms can be confusing to someone who needs money now but does not know which option to choose. The following definitions help to explain what these programs are and how they can help you to get cash fast.

What is a cash advance?
The cash advance definition is fairly straightforward. A cash advance is a short-term loan granted to an individual who may not otherwise qualify for or want to apply for a bank loan or credit card advance. The loan is meant to be a temporary solution to emergency expenses, such as medical bills or car repairs.

As an alternative meaning for cash advance Wikipedia details the terms of a credit card advance. Even though both types of advances require a pay to be paid, they are not the same. Credit card cash advances take away some of the available credit on your card and gather interest until they are paid off.

What is a payday loan?
A payday loan is another name for a cash advance. The name comes from the borrower’s ability to get fast cash now and then repay the loan on payday in two to four weeks. Other names for this type of temporary loan include paycheck loans or cash loans.

What is cash advance process?
New borrowers frequently ask the question, “How does cash advance work?”

The first step to getting a cash advance is to complete an application. The lender asks for basic information, such as the borrower’s contact details, current monthly income, length of employment, and how much loan money is needed.

The advantage of a cash advance over a conventional bank loan is that cash advance lenders do not conduct credit checks. Instead, they base the loan on a person’s ability to repay the debt. The lenders also use a proprietary database to make sure that applicants do not have too many loans outstanding, which can violate state law, and have not defaulted on payday loans in the past, which can mean the person does not have enough regular income to afford a new debt.

If the loan is approved, the loan specialist processes the application and sends the funds to the person’s bank account, like a direct deposit. Most cash advances take one to three business days to show up in a person’s checking or savings account, although faster services for one hour loans are sometimes available.

Like any bank or credit card company, the cash advance lender charges a fee for allowing you to use their money. Fees can either be taken out of the initial loan proceeds or added to the repayment amount at payday, depending on the lending contract terms.

How do payday loans work?
Payday loans work the same way as cash advances. The application is submitted online, the lender approves the loan, the borrower signs an electronic contract agreeing to repay the debt on a predetermined schedule, and the money is sent off to the borrower’s bank account.