Cash Advance Loan

A cash advance loan has several meanings; it may refer to borrowing money against a credit card or a short-term loan obtained from a payday loan store or from an online lender. The latter is the most common use of the term and the cash advance loan business is one of the fastest growing industries in the United States. In fact, there are more cash advance loan stores in the United States than Burger King and McDonald's restaurants combined.

The reason for such proliferation of loan stores is the simplicity of the business model Payday loan stores and online cash advance loan companies are in the business of offering short-term loans for relatively small amounts of cash ($100-$1500) that are intended to be repaid in two weeks. The purpose of such loans is to help people during a small financial crisis that, ideally, will be resolved by the time the borrower receives their next paycheck.

The cash advance loan industry makes it quite easy to borrow money, especially when compared with borrowing from a bank. While a bank may have an extensive application process, require a full credit and/or background check on the borrower and possibly require collateral for the loan, cash advance loan companies generally only ask for proof of employment, proof that the borrower has a checking account, and proof of identification. With that, the loans are usually granted immediately and the borrower has the cash within a few minutes. In the case of online lending, the money is transferred electronically to the borrower's bank account. They usually receive the money within a day; in some cases, they can receive it in as little as an hour.

Some online lenders require that documentation such as a driver's license and proof of a bank account be submitted by FAX, but a growing number of lenders have simplified this process and now advertise themselves as offering “no FAX loans.” These lenders simply require that the applicant complete a form online in order to receive their loan. Many customers find the simpler application process appealing. An added bonus for the lender is that by offering “no FAX” loans, they have a larger potential pool of customers as they may attract people who have no access to a FAX machine.

Interest rates for both online and offline cash advance loans vary according the the states in which the lenders are based. Rates average about $15 for every $100 borrowed. For a short-term loan, this may seem like a reasonable fee. Borrowers should realize, however, these fees can add up in a hurry should they not repay the loan in a timely manner.

The proliferation of no FAX loans has made it easier than ever for people to borrow small amounts of money for short-term cash emergencies. If you have long-term money problems, you might be better off talking to your local bank or credit union.

There are times, however, when you simply need a short term loan fast.  In those cases, it's good to know that there are places that can get you the cash you need in as little as an hour.