A cash advance loan is similar to a payday loan, and it is typically a short term loan that is meant to be repaid within a smaller time period than installment loans. They are called “advance” loans because the idea is that this money is like an advance on a borrower’s paycheck, to be repaid once they hit their next pay period.
The specifics of any given loan can vary based on certain factors like the amount requested and the potential borrower’s credit score. Depending on which types of borrowers a lender is willing to work with, that could also impact the loan terms.
One of the benefits of requesting a cash advance online is that it can be easier and more convenient than doing the process at a bank or other more traditional financial institution. Banks have strict schedules, so you’d need to wait in line to get the process started. As opposed to online where even if you need a bank account, you can still start the process from your phone or computer, instead of being at the mercy of the bank’s hours.
One thing to keep in mind is that it’s virtually impossible to get a cash advance loan with no credit check. Still, there are cash advance lenders who are willing to work with potential borrowers even if they have bad credit. So for people in need of fast cash who don’t mind a short repayment schedule, cash advance loans could be an option to consider.
Requesting a Cash Advance Loan
Because the lending industry is now available online in many places, it can be easier than ever to start the process of requesting a cash advance loan. No longer do you need to venture to a storefront or a bank or credit union. Now, you can start the process as easy as filling out a simple online form. From there, for borrowers who get approval from a lender, they may get the funds they requested in their account as fast as the next day, assuming they meet the necessary qualifications.
There are a few requirements besides just a credit score that a cash advance lender might need to see form a potential borrower. Some of these requirements might include:
Proof of residency
For a lender, they are trying to minimize their risk when it comes to potential borrowers. Even for lenders who work with bad credit borrowers and borrowers without a large income, they still may have a certain risk threshold above which they are not willing to lend money. Providing proof of residency helps lenders determine whether or not a potential borrower is who they say they are. It can also impact loan terms, since certain states have different laws regarding loans, even online loans as well.
One of the main reasons why a lender might ask a potential borrower to prove they have a functioning checking account is because if the borrower gets approved, the funds may be transferred straight into their bank account. Of course, for this to work, the borrower would need an active checking account, which is one of the reasons why lenders may ask for this information.
Once again, one of the main reasons for the requirements lenders stipulate is so they know who they are lending money to and can better evaluate their risk. Some lenders may ask for a form of identification like a state ID or a driver’s license or a passport, so they know that the borrower is who they say they are.
Proof of income
This is one of the easiest and fastest ways for a lender to identify whether or not a borrower might be a high risk to them. Obviously, for a lender to successfully loan money to a borrower, they’ll want to make sure there’s a good chance that the borrower will have the ability to pay back the loan on time. One of the ways lenders might try to determine this is by asking for a proof of income. That doesn’t mean you need to be employed to take out a loan, but you might need to prove some source of revenue that comes in regularly. This helps lenders determine whether or not a potential borrower will be able to stick to the agreed-upon loan terms.
Social Security number
Some lenders might ask for a Social Security number because it is a strong form of identification that can help them assess your risk profile. Like a photo ID, a borrower’s Social Security number is helpful in proving that they are who they say they are. If you were to loan money to someone, you’d probably want to verify their identity first, and lenders are no different.