How to find cash advance loans online and get the lowest rates possible
We’ve all been there. You’re a few hundred short on the bills and just need something to get you to payday. A quick cash advance from the local store seems like an easy solution.
You may not know it yet but that first cash advance is the first trap in a series that will keep you poor until bankruptcy!
Cash advance and payday loans are designed to keep people coming back every few weeks. The fee is low enough you don’t think about it and the loan amount isn’t enough to really get out of debt.
There is a way out of this check advance trap and like a lot of things today, it’s online.
What is an Online Cash Advance?
An online cash advance is different from the one you get in a local payday loan store. Online loans are actually personal loans and peer-to-peer loans with some very important differences from the two-week check cashing stores.
- The interest rate is WAY lower. Cash advance stores charge rates of 500% with their $15 per $100 borrowed fees. That’s because you never get enough to get out ahead, only enough to get you to the next cash advance and the next fee. Rates on personal loans range from as low as 6% to 35% annually.
- You can repay personal loans on longer terms. Traditional cash advances are only available to your next payday, usually two weeks out. That gives you no time to plan your finances or get out ahead. You’re always just two weeks away from your next advance. Personal loans can be repaid over five years, meaning lower monthly payments and more flexibility.
- Borrow up to $50,000 on a personal loan. Most cash advances are limited to $500 or the amount of your next check…just enough to keep you from bouncing checks but not enough to get you out of the cash advance trap. Borrowing enough to pay off your debts with a personal loan means not needing another loan for years or more.
Personal loans and peer-to-peer loans are an actual solution to get out of debt rather than getting stuck in the cash advance trap. Getting one of these online cash advances means you get the money you need to get back on track and stay there.
What to Look for in Cash Advance Websites
The basic requirements to get an online cash advance are the same on most websites. You need to be 18 years old and with an income of $2,000 a month or more. You’ll need a checking account and be a resident or U.S. citizen.
Beyond those basic requirements there are some important differences to look for to get the best deal on your loan.
- Minimum credit score. I’ve listed below some of the websites I’ve used for online cash advances with the biggest difference being the credit score they’ll approve for a loan. All will approve scores of 680 FICO or higher but fewer are available for lower credit score borrowers.
- Loan origination fee. There are a few online lenders that don’t charge a fee but most sites will charge between 2% to 5% of your loan value. Don’t think the no fee sites are automatically your best deal though. No loan fee might just mean the interest rate is higher.
- Interest rate range. Most sites will offer rates in a range from 6% to 36% annually though a lot will depend on your credit score and other factors.
- Term length available. Online cash advances can be repaid in as little as a year or as long as 60 months. Longer terms mean lower monthly payments but usually higher rates.
The important point when comparing online cash advance sites is to apply to at least a few sites for your loan. We’ll talk about this more but applying on more than one site doesn’t hurt your credit score. The websites will all pre-approve your loan to give you an estimated rate and monthly payment terms which you can use to compare for your best deal.
Best Websites for Online Cash Advances for Bad Credit
We’ll cover two groups of websites for online cash advances, one for good credit and one for bad. The only difference here is the type of borrower and credit score requirements between the two. The type of loan and nearly everything else will be identical between the two groups.
Understand, when I say bad credit, I mean borrowers with a 680 FICO score or below. To be honest, that’s not a bad credit score and includes four-in-ten Americans.
The reason we call anything under 680 FICO ‘bad credit’ is because that’s the point where most banks will slam the door in your face.
You see, banks try to sell their loans to investor groups and insurance companies. Loans to borrowers with a credit score around 680 FICO or higher are eligible for government guarantees so they’re obviously much easier to sell. These are called ‘prime’ loans.
Loans to borrowers with a FICO under 680 are called ‘sub-prime’ loans. They don’t have the same guarantees and so investors won’t pay as much.
Now almost all online lenders and cash advance sites will loan to borrowers with slightly lower than that prime credit score but some won’t go much lower than 660 FICO. Others, like the ones in this first group of lenders, will go as low as 540 FICO and approve loans to many more borrowers.
PersonalLoans.com is the most recommended site on the blog. Instead of making its own loans, the website is a loan aggregator which means it matches borrowers with lenders for peer-to-peer loans, personal loans and even traditional bank loans. You get several offers for a loan and can choose the one with the lowest interest rate.
BadCreditLoans is another website that specializes in loans to very low credit score borrowers. In fact, this is your best chance if you can’t get a loan on any other site. The minimum credit score is 520 FICO and there are no origination fees on loans.
The downside to this website is that bad credit borrowers may be limited to loans of $1,000 and under one-year payment terms for their first loan. The rate will still be well below what you’ll pay for a cash advance so it can help you save money while you improve your credit score to get approved for a second loan.
Payoff is an interesting online lender because it restricts loans to pay off your credit card balances. Now technically you can use the money for whatever you like since it is a personal loan but the website is clear about its purpose. Payoff loans are available on terms of up to five years and up to $35,000 with an origination fee that depends on loan terms.
Best Websites for Online Cash Advances for Good Credit
Upstart is a new type of online lender with a unique scoring system that takes into account your education and other factors to approve a loan. While the minimum credit score of 620 FICO is pretty low anyway, the scoring system might help bad credit borrowers get a loan here where they couldn’t on other sites.
I’ve included Upstart in the list of cash advance sites for good credit only because rates tend to be much lower for people with better credit. I would still look to this one though even if you have bad credit just to see if you can get a lower rate.
SoFi is likely your chance at the lowest interest rate possible but you’ll need a much higher credit score than on the other websites. The website offers student loan refinancing, mortgage refinancing and all types of personal loans. There is no loan origination fee and rates are the lowest I’ve seen though they will generally only approve higher credit score borrowers.
How to Get Lower Rates with Cash Advances Online
Getting the lowest rate possible on your cash advance comes down to a couple strategies.
First is to apply on at least a few websites. As long as you apply on all the sites within a 30-day period, it’s not going to affect your credit score. Most online lenders do a soft-check on your credit first to pre-approve you for a loan. This doesn’t affect your FICO at all and even the ones that run a hard check of your credit, all inquiries within a 30-day period are lumped together as one.
It’s the best way to make sure you’re getting the best rate on your loan.
The other strategy here, and you can use the two together, is to only borrow as much as you need and for the shortest term you can afford. Online lenders charge rates based on three factors; your credit score, the amount of the loan and the length of the loan.
- If you can give yourself a few months to increase your FICO score, that’s always going to lower your rate. I realize it’s not an option for a lot of people but it’s really the best way to save on a loan.
- Borrowing less money not only means lower monthly payments but also a lower interest rate. Consider borrowing just enough to pay off your high rate credit cards rather than enough to pay off all your debts.
- A one- or three-year loan will mean lower rates though shorter-terms will also mean higher payments for the same amount of loan. Get the shortest-term loan you can afford.
One last strategy, if you’re having trouble getting approved for the cash advance you need, is to get a pre-loan. This would be something like only borrowing a grand or two on a one-year term and then paying it off as quickly as possible. Not only will the repayment help boost your credit score but most online loan sites will approve people for a second loan at higher amounts if they’ve already paid off the first loan.
Getting a cash advance online is about knowing your options. This includes knowing which online lenders are best for your credit score and how to get the lowest rate possible. It’s not a free solution because you still have to pay back the loan but it will keep you from falling into the cash advance trap with rates as high as 500% a year. Learn what to look for in online cash advances and how to use all this to your advantage.