Instant Cash Advance

What is an Instant Cash Advance

A cash advance is a form of loan that is provided for about two weeks and is to be paid back with one lump sum. Cash advances are also called "payday advance loans," "small-dollar loans," or "fast cash.”

The Amount of an Instant Cash Advance

Payday loans are small in size; lenders usually provide funds ranging from $100 to $2500; however, sometimes, the amount can reach up to $5000. If you require more money than this, you should look into other forms of loans, such as a personal loan or an installment loan.

Where to Obtain an Instant Cash Advance From

Payday advances are provided by a variety of financial organizations, including traditional banks, credit unions, lending shops, and even internet platforms. The latter is the most common method of receiving immediate cash loans since the restrictions are less stringent than those of banks and credit unions. Furthermore, the process is easier and faster and only takes a few hours from application to receipt of funds.

How to Get Instant Cash Advance

As previously said, traditional financing takes longer to apply for and get funds. It can take a few days at times, and these institutions provide money requiring documentation, waiting in lines, and talks with assistants. At the same time, online lending necessitates filling out an online request form, signing a digital agreement, waiting for approval, and having the money instantly deposited into your bank account if authorized. This procedure is completed entirely online, avoiding the need for paperwork collection and long lines.

Application Forms

While the procedures for obtaining traditional and online loans differ, the application forms are very similar and require the same information. The most crucial criteria for these two are the borrower's age (at least 18 years old), residency (clients must be lawful US residents), a valid Social Security number, and a current checking account (to transfer funds directly into it).

How Do People Generally Spend Instant Cash Advances?

Cash advances are designed to meet unanticipated expenditures, such as repairs or small medical bills that put a wrench in a borrower's financial situation. However, seven out of every ten payday applicants may utilize this short-term funding to pay for monthly expenses such as electricity, auto payments, or other debt commitments. Here are the  prevalent fields where payday loans are generally used:

• Regular daily expenditures such as gas and groceries
• Assistance with mortgage payments
• Vehicle payments
• Payments by credit card
• Utilities
• Emergencies

Who Applies for Instant Cash Advances

Payday loans are utilized by 12 million Americans each year to bridge the gap between paychecks, and they cost more than $9 billion per year. According to the most recent statistics on payday lending in the United States, short-term cash advance loans are used by consumers from all demographics and areas of the country.  However, approximately 58 percent of the borrowers are struggling to cover their monthly expenses.

Percentage of People Who Have Utilized a Payday Loan

Age

The following is a breakdown of payday loan demographics based on age. Payday loans are most commonly used by people in their twenties.

1. 5% of those aged 18-24

2. 9 % for ages 25-29

3. 8% for ages 30-34

4. 7% for ages 35-39

5. 7% of those aged 40-44 

6. 7% of those aged 45-49

7. 5% for ages 50-54

8. 4%  for ages 55-59

9. 4% of those 60-64

10. 3 % for ages 65-69 

11. 2% for ages 70 plus 

Race and Ethnicity

Surveys showed that African Americans are more likely to obtain payday loans than other ethnicities. Here is a breakdown of payday loan statistics by race and ethnicity:

1. White- 4%

2. Hispanic/Latino- 6%

3. Other race or ethnicity- 6%

4. African American- 12%

Home Status

Renters are more likely than homeowners to take out cash advances.

1. Renters- 10%

2. Homeowners- 4%

Income Level

Those with an annual salary of less than $40,000 are more likely to take out payday loans than those with a higher income.

1. Under $15k- 9%

2. $15k-$25k -11%

3. $25k-$30k- 8%

4. $30k-$40k- 8%

5. $40k-$50k -5%

6. $50-$75k -4%

7. $75k-$100k -3%

8. $100k and higher- 1%

More About an Average Instant Cash Advance

Here are a few payday loan statistics about an average cash advance:

• The average cash advance costs $520 with fees for a $375 loan.
• The average cost charged by a payday lender for a two-week loan is $55.
• The average payday loan involves a payment of $430 from the borrower's next paycheck, which is equivalent to 36% of the borrower's gross salary.
• Almost 80% of payday loans are obtained within two weeks after repaying a previous payday loan.
• Those who have utilized a payday loan in the preceding year account for 75% of those who take out a payday loan.

Alternatives to Instant Cash Advances

Payday advances are sometimes believed to be more expensive kinds of borrowing, which is why financial advisers recommend more acceptable forms of borrowing. Here is a list of a few of them:

• Payday Alternative Loan (PAL)

• "Bad Credit" Personal Loan

• Low-Interest Credit Card

• Peer-to-Peer Loans

• Cash Advance From a Credit Card

However, remember if borrowed wisely and paid back on time, cash advances cannot ruin your financial stability. Even if you choose one of those "safer" options but borrow more than you can afford and do not repay it on time, you will most likely become trapped in a debt cycle. That is why it is critical to think twice before taking out any type of loan so that you do not jeopardize your financial stability in the future.