Borrowers with poor credit have many options for getting the funds they need to cover short-term expenses, such as rent and other bills. Cash advances are a great example. These can work well for borrowers with poor or no credit but steady income and employment. You can get these loans quickly and roll them over as needed. This article will explain how cash advances for poor credit work, their benefits, and how to repay them on time.
How do cash advances work?
Cash advances are short-term, small-dollar loans that can help tide you over until your next payday. With these loans, you can typically receive a few hundred dollars to cover essential or emergency expenses. You’ll provide information like proof of income, employment, and your bank account information when applying.
Many cash advances are due in two to four weeks. When the loan is due, the lender deposits your post-dated check or debits your bank account to recoup the loan plus fees. You can also pay manually. Here are some benefits cash advances offer:
- You don’t need good credit to get approved: Many cash advance lenders have less strict credit score requirements. They’ll consider factors in addition to your credit score, including income, employment history, and current debts. This makes cash advances a good potential option for borrowers with poor or no credit who need funds fast.
- You can get them fast: Cash advance applications do not take long since all you need to provide are proof of income and employment. In many cases, you can apply, get approved, and receive your funds within the same day.
- You can roll them over if needed: Many cash advance lenders let you extend the loan for a fee by doing a cash advance rollover. This can help if money is tight when the loan is due. But be sure to budget for the loan and potential rollovers to avoid getting stuck in a rollover cycle.
How to repay a cash advance
Cash advances can work well for borrowers with poor credit, but you don’t want to get stuck in a cycle of rollovers. To reduce the chance of that happening, here’s how to repay a cash advance:
1. Budget for the cash advance ahead of time
Start by budgeting for the cash advance ahead of time as much as possible. Cut your expenses for the next few weeks and draw on your savings if possible. If you feel like you’ll need to roll over, that’s fine as long as you budget for it.
2. Shop for cash advances
The better your loan terms, the easier repaying your loan will be. Shop around with multiple cash advance lenders to compare potential terms and get the lowest possible rates and fees. You may be able to browse for loans online to save time while getting a good rate.
3. Mark down the due date
Once approved, mark down the due date because the cash advance lender may take your payment automatically via post-dated check or bank account debit. You want to make sure you have sufficient cash in your bank account to cover that charge. Otherwise, you may face nonsufficient funds and overdraft fees, among other costs.
4. Repay the loan when due
Check your account again right before the due date to make sure there is enough money in your account to cover the payment. If not, move money into that account as soon as possible. You may also be able to pay the loan manually if you have the cash to do so early.
The bottom line
Cash advances are a quick way for borrowers with poor credit but steady income to borrow money. Plus, you can roll them over if needed. However, make sure to budget for the loan and rollovers ahead of time to avoid getting stuck in a rollover cycle. Shop for lenders, then mark down your loan’s due date once approved by a lender. Check that your bank account has enough money to cover the repayment before the due date, and repay it manually if you want. Following these steps will help you successfully repay a cash advance while minimizing fees and stress.