A flexible cash advance loan is an unsecured line of credit that provides you with quick and simple access to funds. A cash advance is a short-term borrowing from a bank or alternative lending institution.
Cash advance loans are more famous with the term “payday loan,” which is primarily used to cover the gap between paychecks. Payday loans are small short-term sums that are due within two weeks or a maximum of a month. These financial products are especially famous due to their fast processing time and minimal requirements.
Flexible cash advance loans are small in size, ranging from $100 to $2500; however, lenders can sometimes issue payday loans up to $5000. These sums are typically used to cover minor medical bills, shopping expenses, short trips, or other urgent and unexpected expenses.
Merchant Cash Advance Loans
Besides payday loans, there are also merchant cash advance loans that are made by banks, credit unions, or, as mentioned earlier, alternative loans. These sums, often known as MCA, are alternatives to standard small-business loans that are lent as a lump sum and should be paid back using a percentage of your debit and credit card sales plus interest rates.
A merchant cash advance is not a loan in the traditional sense. Instead, an MCA provider buys your future sales at a discount. This sort of financing is intended for small firms in need of funds right now, and it may be used to manage cash flow shortfalls as well as meet a range of short-term needs.
Who are Alternative Lenders?
As we all know, traditional lenders are banks and credit unions that offer loans with stringent standards and terms. Alternative lenders, as opposed to banks or credit unions, are primarily online-based, private organizations that function similarly to a bank's lending department.
Online financing requirements are far more lenient and easily accessible to applicants. In addition, Internet lenders do not normally run credit checks before accepting a case, and they base their decisions on the borrower's income. This enables people with bad credit scores to deal with internet lenders more effectively than banks and credit unions, which always utilize the client's credit ratings to determine the customer's creditworthiness.
Interest Rates in Alternative Lending
Although alternative financing solutions often have more flexible requirements, interest rates are higher than in traditional lending. Loans generally have an annual interest rate (APR) of 400 percent or more. For example, to borrow $100, the interest rate ranges from $15 to $30. These financing costs result in interest rates ranging from 390 to 780 percent APR for two-week loans. APRs on short-term loans are significantly higher.
The Process of Obtaining Online Flexible Cash Advance Loans
Working with online lenders is very simple. If you want to get a flexible cash advance loan from an internet lender, you should first choose a platform which you are going to work with. As the internet is filled with numerous options, you should shop around to find the one that has no processing fees and comes with reasonable rates and terms.
As you make your choice, you should start the application process. Online lenders require their clients to fill out an online application form and share some personal and employment data for them to make decisions. As soon as you submit the completed request form, the lenders review it and send you their decision via email.
Note that online platforms work with a huge network of third-party lenders, who look through your request form simultaneously, and your case may be approved by multiple lenders at the same time. You will get notifications via your email and should pick up the lender who you would like to work with.
As long as you choose the lender, you, as a borrower, should carefully discuss the conditions of the loan and review the document that the lender will ask you to sign. If everything is clear with the procedure, you should digitally sign the agreement and send it back to the lender as a sign of consent. The funds are usually available within a few hours at your bank account, which you provide the lender while filling out an online request form.
Advantages of Flexible Cash Advance Loans
Why do millions of Americans every year opt for flexible cash advance loans? Here are some of the most significant benefits of flexible online loans.
- Simple application procedure
- Quickly available cash
- Simple access to the money
- Good credit scores are not required
There are a variety of instances in which a flexible loan might help to settle your financial condition. For example, as mentioned earlier, you can utilize this form of loan to cover an unexpected expense, such as a vehicle repair or veterinary bill, or even to remodel your kitchen or repair your old-fashioned house.