When unexpected emergency expenses rear their ugly head and you’re still a week or more away from your next payslip arriving in your account, you might feel like you’ve got no options. That’s where a cash advance loan might be feasible. With flexible terms and rapid approvals, an instant cash advance is one way to clear your debt and pay it off at your own speed.
What is a cash advance?
A cash advance (not to be confused with a pay or wage advance) is a small loan designed to help you cover a wide range of expenses. In terms of how they work, you can apply for your loan and take anywhere between 16 days and one year (for loans of $2,000 or less) or two years (for loans of $2,001 to $5,000) to repay it.
These repayments can be weekly, fortnightly or monthly and are paid with fees, interest or both, depending on the size of your loan and lender. The main benefits of these loans are that they can be processed and approved quickly and offer an option to those who may not qualify for a loan with traditional lenders.
How much can I borrow with a cash advance?
Cash advances allow you to borrow up to $5,000. However, the amount you’re approved for will vary depending on a range of factors, including:
- Your income and expenses (the higher your disposable income, the more you’ll be able to borrow)
- Where you receive your income from (employment, Centrelink or both)
- Whether you have any savings
- Whether you have any recent defaults for similar loans
- The term you choose (for instance, even if you aren’t approved for a one-month loan, you may be able to borrow the same amount over six months)
How much will my cash advance cost?
The fees for cash advances are fixed and capped, with these fees being based on how much you borrow. Here’s the cost breakdown:
Loans up to $2,000
- Establishment fee of up to 20% of the loan amount
- Monthly fee of up to 4% of the loan amount
Loans from $2,001 to $5,000
- Establishment fee of up to $400
- Interest of up to 48.00% p.a.
This means that the amount you borrow and the time you take to repay it will play a significant role in determining the overall cost of your cash loan.
What can I use a cash advance for?
Cash advances are designed to be highly flexible, so you can essentially use them however you like. Some of the most common uses for these loans include:
- Covering vehicle-related expenses, such as car repairs
- Paying off outstanding bills or debts
- Contributing to regular living expenses
- Funding home improvements
- Being put towards your next holiday
Cash advance vs pay advance: what’s the difference?
Pay or wage advance services are an alternative to cash advance loans. Providers of these products allow you to access a portion of your next payslip early and have it automatically deducted before it hits your bank account. Popular providers of these services include Beforepay, MyPayNow and Wagepay.
The amount you’re able to access with a pay advance varies between lenders, but most will allow you to access up to 25% of your future payslip. The fee structure for these products is also different, with a 5.00% flat fee charged on all advances by most providers, while some also charge up to 24.00% p.a. interest on outstanding balances.
What’s the difference between a cash advance loan and a credit card cash advance?
A credit card cash advance is when you use your card to access or withdraw funds, instead of purchasing goods or services directly. You might do this by withdrawing cash from an ATM or by transferring funds to your bank account.
In that sense, they’re different from cash advance loans in the same way that using your credit card to pay for things is different from taking out a loan. There’s no set repayment period, meaning there’s no cap on the interest or fees you can pay for the advanced amount, and there’s no formal application process as there is for a loan. You can also access more money, with borrowing available up to your credit limit (or 90% of your limit) rather than a hard $5,000 cap.
Cash advances differ from regular credit card purchases in a few ways. There’s an additional fee on your advance, which may range from 1.50% to 3.00% of the advanced amount, as well as some card providers making cash advances ineligible for interest-free periods. This can make credit card cash advances an expensive way to borrow.
How to apply for a cash advance with Savvy
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Apply online
Fill out the quick online form with info about yourself and how much you want to borrow.
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Receive an instant outcome
Your application is sent off and if it hits all the marks of one of our lenders, it’s go time.
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Get formally assessed
They’ll take the time to formally assess your profile and ask any questions if need be.
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Approval and funding
If they’re happy with everything, you can be approved and have the funds sent to your account!
Why apply for a small loan with Savvy?
Tips for keeping on top of your cash advance repayments
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Take stock of your finances
Draw up a budget with your income against your regular expenses, such as shopping, rent and any other loans, so you can work out the most comfortable terms for your cash advance.
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Make additional repayments
Making additional repayments could save you a significant amount in fees across your loan term. The quicker you pay it off, the better. Always make sure to only pay what you’re comfortable with, though.
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Cut down on non-essential expenses
Freeing up extra funds will help put you in a better position to tackle your loan payments more aggressively. For example, if you have entertainment or other subscriptions that aren’t really being used, consider culling them.
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Use a direct debit
Setting up a direct debit to your lender, rather than doing so manually each week, fortnight or month, saves you from having to remember to do so. All you’ll have to do is make sure you have enough in your account.