Online Cash Advance

Online cash advances provide a confidential and quick way to obtain short-term, unsecured money to cover unexpected or emergency expenses from the convenience of one's home computer. This funding is relatively easy to obtain, provided one meets the basic eligibility requirements of the lender, but this convenience comes at a price. To obtain an online cash advance, one must be over 18 years old, have a checking account, and a job which provides a steady income. Some lenders require that an individual has been steadily employed for at least 3 months and earns at least $1000 per month. Individuals apply for the loan online and responses are very fast, typically within a few hours. Credit checks are not a part of the approval process, so bad credit does not prevent a person from securing this assistance.

Once approved, the approved amount of money is directly deposited into the borrower's checking account overnight. Typical online cash advance amounts range from $100-$500, depending on the borrower's monthly income. The duration of the loan is until the borrower's next payday, at which time the loan amount and the finance charge will be automatically deducted from the individual's checking account. The borrower can often extend the length of online cash advances past the initial period, but APRs are high and interest charges quickly add up.

The ease and convenience of this process often comes at a price. The finance charge for an online cash advance is typically $20-$25 per $100 borrowed. The Truth in Lending Act requires that lenders fully disclose the terms of the loan upfront, including the annual percentage rate (APR). Because these loans are for such a short amount of time, a typical APR can be 400-500%. Lenders usually offer loan extensions, which give the borrower more time to pay back the loan but compound finance charges. This can make it even more difficult for a person to clear their debt and borrowers can become stuck in a cycle of ever increasing finance charges and debt.

If a borrower can not repay the amount of the loan, he or she will face increased finance charges, late charges, and the lender can pursue the borrower legally and garnish wages with a successful court settlement. Lenders also report default accounts to credit bureaus which can negatively affect the borrower's credit rating. It is in a borrower's best interest to apply for an online cash advance only in urgent situations and in as small an amount as possible. Online cash advances can help a person "get back on their feet", but the loan should be paid off as quickly as possible. If a borrower pays off the full amount before the due date, a portion of the finance charge is refunded. "Teach me good judgment and knowledge: for I have believed thy commandments" (Psalm 119:66). Being informed about these types of transactions and other options will allow the individual to make a wise and educated decision.

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