If you are in need of quick cash, the first thing that you would like to do is to go for payday loans and cash advances. These two terms are often used interchangeably, referring to getting an advance on paycheck. However, it is absolutely wrong to consider them synonymous with each other. So what are the differences between them? Go through the write-up to learn the major differences between these two fast cash options and what will be the right choice in your case.
Different kinds of cash advances
Cash advance loan is designed in similar way like an online payday or personal loan. Cash advance borrowing allows you to take out a certain amount of loan depending on your income level. This type of cash advance loan requires you to meet payments once paycheck hits your account. It is a short-term loan and required to be paid off within a month.
The second variety of cash advance is based on your line of credit. Its approval does not depend on your monthly earning, rather is based on credit limit available. Cash advancement based on your credit card could be compared with a purchase made on the card. In this case, repayment terms are the same as if you have bought something.
Payday loans are kind of unsecured loans and often termed as payday advances. The intending borrowers don’t require taking out loans against collateral. Credit checking is usually not involved. These loans are based on your income level and you are required to repay it after receiving your next paycheck. However, the repayment schedule of payday loans is usually designed flexible and can be paid off through multiple installments.
Most of payday loans providers will require you to own a bank account where the borrowed money can be transferred directly. Your repayment will also be deducted electronically from the same account on the prescheduled due date. Payday loans that you receive from a storefront require you to issue a post-dated check that the financial institute will cash on or deposit on the date of your next paycheck. The loan terms vary depending on the particular company you are currently working with.
The amount of money borrowed through payday loans depends on your income slab. The limit of these loans usually ranges between $100 and $1000. People drawing a high figure as monthly remuneration will be able to take out a hefty sum. All these are a subject to the lending institute you deal with.