When faced with an unexpected expense, short term loans can be a helpful source of funds. But it’s essential to be informed about the types and process before taking out one of these loans.
When applying for a loan, lenders will review your income and credit history before making an assessment. Some may even take into account the type of benefits you receive.
Credit card cash advance
Credit card cash advances offer you an instant source of funds using your credit card, which can be useful in times of unexpected expenses or emergencies. Unfortunately, they come at a cost.
Before using your credit card to get cash, be aware of the fees and consider alternatives. In general, try to avoid cash advances unless absolutely necessary.
Fees for credit card cash advances typically represent a percentage of the borrowed amount, such as $10 for cash advances up to $200 or 5% if it exceeds that amount.
Additionally, you will likely have to pay interest on the cash advance. Typically, this rate is higher than regular purchases and begins accruing immediately, so it’s best to repay it as quickly as possible.
Other possible alternatives to consider are borrowing from friends and family or joining a lending circle. Both can be less costly than cash advances while not damaging your credit as severely.
Cash advance for Social Security and SSI recipients
With age comes increased financial uncertainty and this can lead to unexpected expenditures, leaving you without enough funds for emergencies or large purchases. It is easy for things to become out of hand quickly when life throws you a curveball.
Fortunately, short term loans for people on benefits such as Social Security and SSI recipients exist to help meet immediate expenses without depending on your next paycheck. These cash advances are an ideal solution for covering unexpected costs like medical bills, car repair or an oil leak.
However, it’s essential to remember that taking out a cash advance on disability payments could jeopardize your SSI benefit. If you fail to repay the loan, the amount owed could quickly grow exponentially.
To avoid becoming a victim of disability cash advances online, it’s best to look into other options before taking out one. For instance, using your Direct Express debit card for emergency spending instead of a payday advance could reduce the origination fees associated with such advances and slow the growth in your balances.
Business cash advance
Are you searching for an expeditious and flexible way to access cash? A merchant cash advance could be the ideal solution. This type of loan allows you to borrow against future credit card transaction sales, providing you with quick access without needing to pledge collateral.
Repayments for credit card sales are calculated based on the amount earned; thus, they can adjust according to your business’ growth or decline in activity. They may range anywhere from three to 18 months in duration, depending on how much money you earn.
But they tend to be much pricier than standard small business loans, and since they don’t report to the business credit bureaus, your business may not benefit from this kind of funding.
An alternative to a merchant cash advance is factoring, which provides you with cash immediately rather than waiting for customers to settle their invoices. Unfortunately, this financing solution tends to be less reliable and may require you to sell some of your outstanding invoices at a discount in order to break even.
Accounts receivables line of credit
An accounts receivables line of credit is a financing solution that can provide you with quick cash to meet time-sensitive needs. This type of funding may be particularly advantageous for small businesses looking to invest in growth initiatives or take advantage of supplier discounts.
Companies who avail of this funding option agree to prepay some or all of their outstanding invoices in exchange for a fee. Companies can use accounts receivables for various purposes like payroll, equipment purchases, materials purchases and expansion.
Accounts receivable financing is an ideal alternative for businesses that lack access to traditional business loans. Unlike these loans, which usually require collateral and a good credit score, accounts receivable loans are secured by your outstanding invoices.
Acquiring accounts receivable financing is a fairly straightforward process. All you need to do is compile your current business bank statements, tax returns, and most recent customer invoices into an application package. Lenders will then review this data and run a credit report.