The car has to go to the workshop, the washing machine breaks, a high additional payment is due and Christmas is just around the corner – sometimes consumers come unexpectedly into a financial emergency. In such a situation, those affected quickly need cash and look for potential lenders. A so-called cash credit can help. The following article shows what this is, how it can be included and what consumers should pay attention to.
What is a cash advance?
Note: Especially in financial need, those affected sometimes lose their judgment as to the seriousness and fairness of a (credit) offer. The risk of an inexperienced or overly hasty approach by potential borrowers is that they conclude a cash advance with a dubious lender at overpriced prices. Finding out in advance and comparing offers with one another only takes a few minutes, but usually brings high interest savings.
A cash loan is a loan model in which the loan amount was originally paid out in cash. Customers of a branch bank went to the counter for this purpose, customers of a direct bank received the money from a courier service. However, it has now become established that lenders also use the term cash credit to make lightning transfers to a borrower’s checking account. In any case, a cash loan is paid out within a short time, sometimes on the same day. Nowadays, applications are made almost exclusively online.
Note: A clear distinction between cash credit and instant credit is not possible in practice, the terms are used interchangeably. The overdraft facility (overdraft facility or overdraft facility) is also referred to as a cash advance. The account holder can overdraw the account up to an agreed credit line. Cash payment at the ATM is possible around the clock. Consumers can repay the overdraft facility at any time and determine the amount of the installments themselves. However, this form of cash advance is expensive and should not be used in the long term. Whenever possible, it is advisable to settle an overdraft facility as soon as possible.
The advantages and disadvantages of a cash advance
|Rapid availability.||Cash loans are usually more expensive than traditional installment loans.|
|Often no Credit Bureau check, so the cash credit is also available for people with a negative Credit Bureau entry.||Anyone who has had payment difficulties for a long time can slip into the debt trap if the cash loan is too high.|
|Self-employed persons, low earners and other groups of people who have difficulty getting a loan also have the opportunity to raise money with the cash loan.||The uncomplicated application and approval tempt you to borrow more money than necessary.|
|Online application possible at any time, even on weekends.||High repayment rates in a comparatively short time.|
Why is a cash loan more expensive than a classic installment loan?
From the bank’s point of view, issuing a cash loan involves comparatively higher risks because the creditworthiness is only checked superficially. The potential borrower only needs to provide a few details on a form and the lender relies on the accuracy of the information provided. A Credit Bureau test is often not carried out. The bank can pay the increased risk of a possible default and the quick settlement by charging the cash loan with higher interest rates.
Who is the cash loan for?
A cash credit is suitable for consumers who need a manageable amount of money within a short time. Amounts between 500 and 5,000 dollars, which are usually granted as part of a cash credit, are suitable for bridging a temporary financial emergency. However, if consumers have had financial difficulties for a long time, the cash credit could lead them to fall even further into the debt trap.
The cash loan is primarily designed for private individuals, it is a consumer loan for private purposes. Sometimes, however, the self-employed also use this funding in order to be able to make short-term purchases, for example computer hardware, to run their business. In this situation, the self-employed are advised to take out a conventional installment loan on better terms and only to use the cash loan if there is no other option.
How does a cash advance work?
With a cash loan, borrowers submit a loan application online and receive a binding commitment or rejection within 24 hours. A cash credit is linked to an immediate payment, whereby the payment is made in cash or as a transfer to the checking account. In most cases, repayment starts almost immediately or after a short break in payment. A cash loan is often to be paid off in comparatively high installments and within a relatively short time. Loan terms of up to 96 months (rarely longer) are also possible, but in view of the high interest rates this is not an economically sensible decision.
Must a specific purpose be specified?
Borrowers of a cash loan do not have to specify a purpose. You can freely dispose of the money. As soon as the application has been checked and the payment has been made, borrowers have access to the loan amount and can use it for any purpose.
What are the requirements for cash credit?
To receive a cash loan, borrowers must be at least 18 years old and have regular salary receipts. Generally, borrowers must be creditworthy and creditworthy:
- Anyone over 18 who is not under guardianship is eligible for credit.
- Banks check the creditworthiness based on different criteria (salary, work situation, existing loans).
Note: In the case of a cash loan, only a few details are requested and checked compared to classic installment loans, for example the regular receipt of salaries.
What characterizes a reputable provider of cash advances?
Reputable providers of cash loans are usually well-known direct banks that have a corresponding banking license. Online offers from well-known branch banks can also be classified as serious.
Reliable providers can be reached by phone and answer all questions that arise in connection with a loan. In addition, they do not urge anyone to sign a contract. If you are not sure whether a lender can be trusted, you should trust your gut feeling and refrain from financing.
How can I take out a cash loan?
Potential borrowers who are looking for a cash advance have several options. You can ask your own bank or search for providers using relevant search engines. However, there is a problem: The time required for manual search is quite high, which in turn means that not enough alternatives can be used to compare the offers. Borrowers often pay that with high interest rates and poor repayment modalities.
Fast and secure borrowing from Across Lender
If things have to go quickly, the loan comparison at Across Lender is a transparent, reputable and helpful source for finding a loan. Although consumers do not receive traditional cash advances, the installment loans offered are also processed and paid out quickly. How to apply:
Interested parties simply enter the desired loan amount and can then select a term. The term “free use” should be selected for the intended use.
Clicking the “Recalculate loans” button generates a list of offers that are generally available.
The presentation of the main loan terms is particularly consumer-friendly. Potential borrowers immediately see the amount of the monthly installment and find out the range within which the borrowing rate and the annual percentage rate lie. Sorted by price, the cheapest provider is at the top and the most expensive at the bottom.
Tip: Another plus is the additional information for each individual loan. Consumers receive the essential key data of the loan via the info button for the tariff details. For example, you will learn how the credit check is carried out, how high the processing fees are and whether special repayments are offered. Further markings indicate, for example, which loans are offered as an instant loan and which loans are particularly easy to apply for.
So well informed, consumers can quickly make a decision as to which provider is of interest to them. Consumers only receive a concrete offer after their request has been received by the bank.
4 tips for a cheap cash advance
The cash loan is one of the most expensive loans for consumers. They should be careful when choosing the right provider. With these tips, prospective borrowers save money:
- Keeping the loan amount as low as possible, that expresses the total costs.
- Make the loan term as short as possible, which also ensures lower overall costs.
- Compare several offers to find the cheapest provider.
- Compare the loan terms with one another: Cash loans with special repayment rights offer the option of repaying a loan early and thus shortening the term. This reduces the total loan costs.
Tip: If you want to quickly compare several offers from different providers, you can use the free and anonymous loan calculator from Across Lender. Here you can find all the relevant information that loan seekers need to be able to make a decision quickly.