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You get a flat tire. Your pet gets sick. Or you need a root canal right away. If an unexpected emergency pops up, you might need to borrow money quickly to cover the cost — such as with an online cash advance loan, also known as a payday loan.
However, while a cash advance could be a fast option, these loans have significant drawbacks that could cost you.
Here’s what you should know about online cash advances:
- What is a cash advance?
- How is a cash advance different from other loans?
- Can you get a cash advance loan with bad credit?
- A personal loan could get you funds the next day with more favorable terms
- Credit cards can offer a cash advance — but check for fees
What is a cash advance?
A cash advance loan is a type of small-dollar, short-term loan meant to tide you over until your next payday. You’ll pay fees to borrow the money, even if your repayment term is just a week or two. Then on your next payday, you’ll have to repay the loan and fees in full.
The fee ranges from $10 to $30 for every $100 borrowed (fees are commonly 15% per $100 borrowed). For a two-week loan, the fees can equate to an APR of 400% or higher.
Check Out: Where to Get a Personal Loan
How is a cash advance different from other loans?
| Online cash advance loans | Personal loans | |
| Fixed rates | Can be 400% or higher | 5.4%+ * |
| Loan amount | Up to $500 (on average) | $600 to $100,000* |
| Loan terms | Typically until your next pay period (14-30 days) | 1-7 years (depending on the lender |
| Time to fund | As soon as the next day | 1-7 days |
| Credit check required? | Typically no | Yes |
| * With Credible partner lenders | ||
Cash advances differ from personal loans in several key ways:
- Rates: Personal loan interest rates tend to be much lower than the rates on cash advance loans. For example, if you take out a personal loan with one of our partner lenders, you might get a rate as low as 5.4%+ , while the rate on a cash advance loan could equal an APR of 400% or higher.
- Amounts: The average payday loan ranges from $350 up to $500. You can borrow much more with a personal loan. For example, you could get a $5,000 personal loan or even a $100,000 personal loan, depending on the lender and your credit.
- Repayment terms: With a cash advance loan, you typically have only until your next payday (14 to 30 days) to repay your loan. You’ll have much longer to repay a personal loan — usually one to seven years, depending on the lender.
- Time to fund: Cash advances are usually quick to fund — you could get your money as soon as the next day with an online cash advance or even on the same day if you apply in person. The time to fund personal loans depends on the lender but generally takes about one to seven days.
- Credit checks: Cash advance lenders typically don’t run credit checks. Instead, approval is based on your employment and pay stubs. Personal loan lenders, on the other hand, generally do check your credit to determine your eligibility. To qualify for a personal loan with a low interest rate, you’ll likely need good to excellent credit.
A personal loan is generally a much less expensive option than a cash advance loan. If you get a cash advance loan, you could end up paying far more than you originally borrowed.
If you decide to take out a personal loan, be sure to consider as many lenders as possible to find a loan with the best rate and terms for your needs.
It’s also a good idea to consider how much the loan will cost you over time. Before you borrow, estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Learn More: Types of Personal Loans
Can you get a cash advance loan with bad credit?
Cash advance lenders typically don’t require credit checks. Instead, your loan eligibility is based on your employment and pay stubs. This means you could likely still qualify for a cash advance loan even if you have bad credit.
Payday lenders and cash advance companies often target people with lower credit scores. Because these loans have extremely high rates and fees, and many payday lenders don’t consider your ability to repay the loan, this type of loan could be considered a form of predatory lending. It’s important to make sure that you’re working with a reputable lender.
Some lenders also allow cosigners on personal loans. Having a cosigner with good credit could help you get approved or qualify for a lower rate than you’d get on your own.
Check Out: Secured Personal Loans
A personal loan could get you funds the next day with more favorable terms
In almost every case, a personal loan is a much better choice than a cash advance. On top of lower interest rates, personal loans generally give you a few years instead of a few weeks to repay the loan — making the payments more manageable.
Plus, depending on the lender, you could get your funds from a personal loan as soon as the next day. Some lenders even offer same-day funding.
If you decide to take out a personal loan, remember to shop around and consider as many lenders as you can to find the right loan for you. This is easy with Credible — you can compare your prequalified rates from our partner lenders in the table below in two minutes. Some of our partners also offer funding as soon as the next business day after approval.
| Lender | Fixed rates | Loan amounts | Min. credit score | Time to fund |
|---|---|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** | 550 | As soon as the next business day (if approved by 4:30 p.m. CT on a weekday) |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 15.19% APR | $10,000 to $50,000 | 700 | Next business day |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 35.99% APR | $2,000 to $50,000 | 600 | As soon as 1 to 3 business days after successful verification |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99% - 24.99% APR | $2,500 to $35,000 | 660 | As soon as the next business day after acceptance |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 35.99% APR | $2,000 to $36,500 | 580 | As soon as the next business day |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 22.49% APR | $5,000 to $100,000 | 660 | As soon as the same business day |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.0% - 35.99% APR | $1,500 to $20,000 | None | As soon as the same day, but usually requires a visit to a branch office |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99% - 35.99% APR | $2,000 to $50,000 | 640 | As soon as one business day |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.69% - 35.93% APR7 | $1,000 to $50,000 | 560 | Within one day, once approved9 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.96% - 35.97% APR | $1,000 to $50,000 | 560 | Within a day of clearing necessary verifications |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.4% - 35.99% APR4 | $1,000 to $50,0005 | 580 | As fast as 1 business day6 |
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Credit cards can offer a cash advance — but check for fees
If you have a credit card, taking out a cash advance on the card could be another option when you need money quickly. Cash advances are usually capped at a percentage of your credit card’s credit line.
For example, if you have a $10,000 credit line with a 30% cash advance limit, you could take out $3,000 in cash.
Keep in mind that credit card cash advances typically have a higher APR compared to the interest rate for regular purchases. You might also have to pay a cash advance fee.
If you made only the $60 minimum payments each month, it would take you 59 months to repay the cash advance. You’d also pay $2,121 in interest charges. Together with the $150 fee, you’d end up paying $5,271 for the cash advance.
Learn More: What You Can Use a Personal Loan For
