Low Interest Cash Advance Secrets

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Low Interest Cash Advance

You may have seen ads for a low interest cash advance. They certainly could come in handy if you need emergency cash.

Although there are no truly low interest payday loans, some are certainly a lot lower than others. Since we can easily find them on the Internet, a little time spent doing research can save you tens, if not hundreds of dollars.

A cash advance, sometimes called a payday loan is a short term loan that most people use to help overcome a temporary financial problem. It only takes several minutes to apply for a loan and most people are approved, whether their credit rating is good or bad.

When you’re approved, your money will be transferred into your bank account. The whole process – from the time it takes to fill out the application until you get your money – takes under 24 hours.

How Much Does a Low Interest Cash Advance Cost?

Although some companies advertise low interest rates, it is really relative because interest rates for cash advances are much higher than what banks charge. However, unlike at a bank, most people will be approved for a payday loan no matter what their credit history is.

I have found some online cash advance companies that charge less than 10% to a first time borrower while others charge up to 30% interest. The difference adds up to a lot of money.

Let’s look at the extremes.

To keep things simple, let’s say that you want to borrow $1,000. If the interest rate is 10% you will have to repay $1,100 when the loan is due. At 30% you will have to pay back $1,300, even though you are borrowing the same amount of money.

Although $100 interest on a thousand dollar loan is a lot of money, it sure beats having to pay $300 in interest any day.

How to Find a Low Interest Cash Advance

If you can invest a half hour to an hour of your time to search the internet you can get the information you need to find the best cash advance companies.

The people who pay the lowest rates compare interest rates, the term (length) of the loan, whether or not there are additional fees, and the quality of the company.

• What is the cost of the loan?

You can usually find the interest rates on the payday loan websites in either under FAQs or “APR Disclosure”.

APR stands for annual percentage rate. Keep in mind that although the APR quotes rates on a yearly basis most payday loan companies expect you to repay your loan in 14 days or less. You should see these costs on the same page.

• Do they offer a lower rate for a first time borrower?

Some cash advance companies offer a substantial discount for a first time borrower. A recent search came up with a 9.31% rate for a first time borrower looking for a low interest cash advance. At that rate it takes $1,093.10 to repay a $1,000 loan.

Other payday loan companies offer lower rates for people who have borrowed money from them several times. Hopefully you won’t find yourself in this situation, but if you do you can save quite a bit of money if you have this option.

• Are there any other fees or hidden charges?

Make sure to read all the documentation to find out if there are any additional costs involved. A company that offers a low interest rate but charges additional fees may end up costing you more than another company that charges a slightly higher interest rate.

• Does the company charges a flat rate or do they prorate the interest?

If a company charges a flat rate it will usually be for up to a 14 day period. If that is the case, it would probably be in your best interest to repay your loan in 14 days because it won’t cost you any more money than repaying it in 7 days or less. This way you have a little bit of a cushion should something come up.

However, if the payday loan company charges you on a daily basis, you will get the best low interest cash advance by repaying the loan in as short a time period as you can. Some of these companies also offer a rebate if you repay your loan ahead of schedule.

• What does the Better Business Bureau say about them?

Once you have found the companies that offer a low interest cash advance, find out as much as you can about the companies before applying for the loan. A good place to start is the Better Business Bureau website.