If you’re facing an unexpected bill, car repairs, or another urgent financial situation, there are subprime lenders and credit brokers that can help you get the cash you need, when you need it.
Cash advance loans are designed to provide fast access to funds, even if you have a poor credit history.
Understanding Cash Advance Loans
Before applying for a cash advance loan, it’s important to understand how they work and differ from other short-term loan types.
A cash advance loan is a short-term loan designed to give you fast access to funds, typically meant for emergencies or immediate expenses. Unlike long-term loans, cash advances are usually small amounts of money, often repaid within a few weeks or months.
These types of advances are designed to be easy to apply for and can sometimes be approved on the same day.
Difference Between Cash Advance Loans and Other Types of Short-Term Loans
Cash advance loans differ from payday loans and personal loans mainly in how they’re used and repaid.While payday loans are often linked to your salary and repaid on your next payday, cash advances can offer more flexibility in terms of loan amounts and repayment schedules.
As they’re usually based on your income, they don’t rely on credit checks exclusively, instead, focusing on your ability to repay the money borrowed.
Why People with Poor Credit Might Consider Cash Advance Loans
Those with a poor credit history are more-often-than-not financially excluded from legacy lenders like banks and building societies. Lenders offering cash advance loans focus on lower amounts, opting to review applications for affordability to repay within the loan term, rather than basing decisions on your past credit history. These loans can help you cover an emergency expense when other options aren’t available.
Eligibility and Application Process
Understanding whether you’re eligible for a cash advance loan and knowing the application process can help streamline the process of applying.
To apply for a cash advance loan in the UK, you typically need to be at least 18 years old, a UK resident, and have a valid bank account. While a good credit score helps, it’s not the only factor. Lenders often focus on your current income and ability to repay the loan, not just your credit history.
- Documents and Information Required for Applying
When applying, you’ll usually need to provide proof of income (like payslips or bank statements), identification, and your bank account details. Some lenders may ask for additional information to assess your affordability. This is usually an income and expense sheet.
To get help with this, use a free online budgeting tool.
Once you know what you have left as disposable income, you’ll be better able to identifty a loan within your budget. The following 4-step process helps you find the right lender that fits within your budget.
- Find a lender: Start by searching for UK-based cash advance loan providers that suit your needs. Lenders and credit brokers are required to be registered with the FCA. You can verify the authenticity of loan providers using the FCA register.
- Submit your application: Fill out the online form and upload your supporting documents. Decisions are faster using an online applicaiton process than posting documents back and forth.
- Approval process: The lender will review your information, and if approved, you could receive your funds within hours or the next business day.
How Lenders Assess Applications from Those with Poor Credit History
Lenders who offer cash advance loans to those with poor credit focus on your current ability to repay. They’ll look at your income, employment status, and overall financial situation. Some may even offer loans to people with CCJs (County Court Judgements) or previous bankruptcies, provided they meet the lender’s criteria.
Frequently Asked Questions
Is a cash advance different from a loan?
Yes, a cash advance is a type of short-term loan. The key difference is that a cash advance is typically used for smaller, emergency expenses and repaid over a shorter period compared to traditional loans.
How quickly do I have to repay a cash advance loan?
Cash advance loans usually need to be repaid by your next payday or within a few weeks. The exact repayment period depends on the lender’s terms, but they are generally short-term loans.
