There are three different definitions for the term cash advance. Banks use it differently in communicating with clients, who in turn have a completely different idea of this type of loan.
The cash advance in the banking language
In the Bank, a cash advance means a line of credit that the owner as well as cash can use at any time. The most well-known example of a cash advance according to the technical terminology used by the financial institutions is therefore the discretionary credit. This is given to most current account holders with regular incoming payments.
The cash advance in the customer communication of the banks
In the communication between banks and their customers, the use of the term cash advance for a non-purposive installment loan has become commonplace. The borrower may have the loan amount as freely as cash.
Most banks do not associate the use of the product name cash advance that the customer can claim the cash payment instead of transferring the loan amount to his bank account. In the sense of the term use in the customer communication the cash advance was almost exclusively opposed to the car loan as a special form of an installment loan.
On the other hand, more and more banks are now offering their clients installment loans on preferential terms for different uses where borrowers have to prove the use of funds. As bank customers are not allowed to use these reduced-rate installment loans as classic consumer loans for any purpose, financial institutions do not speak of cash advances when they are awarded.
The cash advance in the understanding of the majority of bank customers
For a large part of bank customers, the term cash advance is associated with the idea that the lender does not transfer the money they have taken to a bank account, but pays it out as cash. In fact, even the branch banks have largely abolished the payment of loan amounts in cash, or at least only carry them out in exceptional exceptional cases according to a separate agreement.
5 tips for cash advance
1. Use Online Comparison Calculator
You can quickly and cheaply obtain a cash advance, especially through an online comparison portal for cash advances, with which you can quickly and easily find the best possible offer for a cash advance on the net. A cash advance is a use-free loan, which you usually get the cheapest and fastest promised online banks.
You only have to filter the best loan for your desired conditions in the possible comparison portal in the network – eg repayment period, interest rate or additional options such as early repayments, etc.
2. Examine the conditions carefully
Pay attention to a cash advance – as with all other loans – but especially on the fine print. Thus, the terms of credit to credit are often completely different and returns a supposedly good deal quickly into negative.
A good lending rate is important, but all other conditions such as repayment period, the possibility of special repayments and any insurance options for the repayment default should be considered. Also, the respective cash advance should be paid in one sum to your corresponding current account.
3. Get several offers
You can get your cash loan quickly if you get the offers from several banks online – ideally then at several direct banks. Of course, this increases the likelihood that one of the requested banks will finally grant you the promise of your desired cash advance.
Other advantages that banks generally like to see when applying for credit are, of course, a permanent contract with an income that is as compatible as possible with the loan agreement – the cash advance may not exceed the amount of your own income by more than 10 times. This gives the bank the necessary assurance that the borrower could actually service the installments.
4. Have all documents ready
If there are various offers on the net, the banks then check your application and then send you a fast-response or cancellation request. Here you come back into the game and have the bank for the final commitment still submit some documents.
5. Successful completion
Are all documents submitted and these also certified via Post-Ident or Video-Ident method. So you will give as soon as possible a final commitment on your loan and the bank will – in so far as all these process are carried out as quickly and smoothly as possible – then notify the same in writing.
What are the requirements for a cash loan?
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If you want to apply for a normal loan, it is important that you have a positive Credit bureau statement. The Credit bureau is the first point of contact of almost all established banks when it comes to making a loan decision. If you have a negative Credit bureau, then you have little chance of getting credit in the traditional way. For that, you need a regular income, the amount of which makes it likely that you can easily pay the loan installments. How high the income has to be depends on the respective life situation.
If you earn 1500 euros net but have to pay 1000 euros rent, it is something other than an income of 1500 and a monthly rent of 500 euros. Likewise, the existing monthly liabilities are taken into account.
What if the income is insufficient?
If, according to the bank, the creditworthiness is insufficient to serve the required credit, there is still the possibility of offering collateral. This can be a life insurance, for example, or the surrender value of a life insurance. This is assigned to the bank to secure the loan and if the credit burst due to lack of service, the bank can withdraw the surrender value of the life insurance.
If the bank is not satisfied with the creditworthiness or income of a client, then there is the possibility to include a second borrower in the credit agreement. This can be a friend, a life partner or even a family member, if he / she is creditworthy. The bank has the opportunity to collect a broken credit for lack of service in both people to the full amount. This is often enough to get a cash loan.
Is there any other way to get cash?
A relatively cheap way to get money is the way to the pawnshop. If you have something valuable, such as jewelry or a high quality electrical appliance, then you can lend it in a pawnshop. These can be found in every major city. But you have to be aware that if you can not serve the loan, you will never see the item that you pledge and deposit there.
What else is there to pay attention to cash advance?
Think about whether you really need a loan.
Borrowing money means making a commitment: the borrower promises to repay the borrowed amount after a certain amount of time. This usually happens in installments that burden the borrower. It only makes sense to burden oneself when you acquire something that is available during and after the repayment period: something that, when it is finally paid, still has value: that gives you the feeling that you have more than before.
For loans that have been used for holidays or giant festivals, only the load remains.
Consider exactly and honestly, how much money you can spare monthly.
How much money is left on your account every month before the salary is received? How much do you save monthly? What if suddenly the fridge breaks? How much could you limit yourself ? How safe is your workplace? What is the case of a long illness with the payment of sick pay instead of salary ?.
Assess your creditworthiness.
If you have decided to take out a loan, consider whether you can get it on reasonable terms. On the Internet you will find garnishment tables. On the basis of these tables, you can determine to what extent income is attachable : the attachable amount determines the amount of the credit installment. Wages can be assigned multiple times: if an already existing wage assignment is not mentioned on demand, then the borrower has committed a criminal offense.
Get all the important papers before applying for the loan.
- The payroll documents are regularly required: usually the payrolls of the last three months are sufficient with the accumulated amounts of the taxes paid and the SV contributions. On the payroll should be noted next to the name and the residential address.
- A copy of the passport with confirmation of registration or the identity card
- Very helpful is a certificate from the landlord that there are no rental debt with the information that the lease is indefinite and since when it exists
- The Credit bureau self-information
- The information from the debtor directory (there is the local district court)