Never Miss A Cash Advance Payment!There are many reasons why we take the option for obtaining a cash advance, such as unexpected bills or expenses, home repairs, school expenses, or other personal matters. While there are many reasons to obtain a cash advance the type of cash advance we want will entirely depend on why we need the cash in a quick manner. People who need less than $25,000 and have good credit, generally opt for an unsecured loan.
Generally, cash advances are taken into consideration for the purpose of getting quick cash. These types of loans are good for those who do not have good credit, as there are no credit checks performed in order to obtain a cash advance. Cash advances are short-term loans that are taken against the person's income and have to be paid back as soon as the person receives their next paycheck. The borrower must fulfill certain requirements in order to be eligible for a cash advance. Generally the cash advance lender will need proof of 3 months of employment with the same employer and the borrower must be over 18 years old. A cash advance should be used for emergency purposes, but should not be used as a regular source of money.
Secured Loans are More Suitable for Long-Term Purposes
For people that have poor credit obtaining a secured loan is another option. Considering a cash advance is a secured loan, it is better for people that are homeowners. The process is similar, as lender sill simply lend money against the home's equity. The home can be mortgaged or be fully owned, however the loan is given on the basis of a home in these situations. The interest rates on loans such as these are typically low and the periods to repay the loan are long. Loans such as these may be repaid over long periods of time and can extend up to 30 years. Lending company representatives will assess the value of the home, on the basis of what loan is given to decide the asset's (home) value. There are a lot of lenders that lend as much as 125% of the value of the house, while others may lend 85% of the value of the house.
The Negative Equity Trap
The main problem with this type of loan is that the loan's interest rates may increase or decrease with the value of the home. If it is the case where property values are dropping, the interest rates will increase and homeowners find that they are trapped in negative equity. Being in negative equity will increase the amount of the loan repayment. This situation is not a good one and can damage the borrower's credit rating.