George Williams

Cash advance types, options and alternatives

Payday Loan, installment loan, Cash advances, Merchant cash advance No Comment

At some point in our lives, we may find ourselves in situations where we are in need of financial assistance. It could be an emergency, a fantastic business opportunity or  regular bills that you can’t pay at the moment.  When borrowing money, it’s good to know your options as having the information and making the right choices is crucial for your overall financial stability. So let’s look at some borrowing options.

What is a merchant cash advance?

Merchant cash advances
Merchant cash advances

A merchant cash advance is a lump sum of capital that isn’t really a loan but is a purchase of a fixed dollar amount of a business’s future credit and debit card receivables. The merchant cash advance provider buys a specified dollar amount of your business’ future debit and credit card sales at a lower price and instead of having you repay one fixed monthly payment.

Your business remits a fixed percentage of its daily credit and debit card revenue automatically until the specified quantity of purchased receivables is remitted in full to the merchant cash advance provider. Merchant cash advances have some advantages. You don’t need a stellar credit history to be approved for one and the remittances are automatic and don’t require you to write any checks. All in all, getting a merchant cash advance is easier and faster than taking out a traditional loan.

What is a credit card advance?

A credit card cash advance is a service provided by many credit card institutions. It allows cardholders to withdraw cash up to a certian limit either through an ATM, a bank, or some other financial agencies. Credit card cash advances normally have high interest rates which could be even higher than those of the  credit card itself. The interest starts to increase immediately after the money is borrowed. On the bright side, credit card cash advances are fast and easy to obtain.

The credit card advance amount depends on the borrower’s credit score, the business and its credit card sales. In most cases, credit card cash advances should be used as a last resort option. However, many businesses with bad credit still use credit card cash advances to finance their businesses in times of need.

What is a payday loan?

Payday loans
Payday loans

Payday loans are one of the fastest and best ways to get instant cash. No matter what your financial problem is, applying for a payday loan will get you the much needed amount of money in no time. Since the service is really fast and easy to qualify for ( having bad credit is not an issue), payday loans have very high interest rates, much higher than those of traditional bank loans.

That’s because of the risk that payday lenders take in not seeking collateral from borrowers, lending cash to applicants with bad credit history and only asking for basic personal information and documentation. With payday loans, you usually don’t want to borrow more than what you can repay with your monthly paycheck.

What is an installment loan?

Installment loans are loans in which the principal and interest are repaid in a number of repayments over scheduled intervals.

An installment loan is usually a long-term loan and can be repaid in up to 30 years and is considered to be the safer and more affordable option than title loans or payday loans. The installment loan is usually secured by the borrower’s personal property. When taking out an installment loan, the borrower must use a lending company that operates in the same area where he resides as all Installment loans are serviced locally. Installment loans are pretty fast to obtain and usually takes no more than one business day for the money to be deposited into the borrower’s bank account.
It’s safe to say that the more information you have on different loan options and alternatives, the more you’re able to make the right decisions.

 

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