How to Get Cash Advance in Nigeria

Loans are undoubtedly a source of great help and relief at times of financial needs. However, they can somehow prove very difficult to access and, if you are lucky to come by any, the demand for paper work is always very tedious that some consider abandoning the pursuit. While this is a problem, the Cash Advance is the exact solution to this problem, because it allows you to borrow money on the go, using your credit card. However, there are certain conditions you need to fulfil to be able to qualify for the cash advance loan.

What is a Cash Advance?

Basically, a cash advance loan is a short-term loan provided for someone by an individual, banks or a lending company. This type of loan is offered through the credit card mechanism which allows the borrower to spend on the go and pay back at a later date.

The credit card allows you to withdraw a limited amount or make purchases. Meanwhile, this loan comes with high interest rates and miscellaneous fees. Yet, many people prefer for the ease in accessing it in times of emergency.

While taking this loan may not directly impact your credit card, it will impact it indirectly by rising your outstanding debt which, in turn, impact your credit utilization ratio–a factor used in evaluating credit scores. Check out the list of Federal Goverment Free-interest loans.

Types of Cash Advances

Depending on the nature of the supposed loan, there are a number of cash advances. But, the common thing about them is that they share high interest rates.

1. Credit Card Cash Advances: Undoubtedly the widely known among them, it is essentially about borrowing on your line of credit through your credit card. To withdraw such money, you can use the Automated Teller Machine (ATM), or use it directly to pay online bills. As we have already said, the interest rate on borrowing with credit card is always very high. Thus, about 20% – 30% interest is involved and it begins to accrue instantly. Check out difference between credit card and debit Card.

2. Merchant Cash Advances: In contrast to credit cash advances, merchant cash advances refer to merchant or business personnel. In simple terms, this is when merchants or companies with poor credits decide to choose cash advances. Depending on the situation however, you can pay for such advances with credit card receipts or rather with a percentage of the gains the business receives from sales of its online account.

3. Payday Loans: This loan looks at the borrower’s paycheck rather than the credit score. The payday givers issue it depending on your income per month. Similarly, payday loans have high-interest rates that could occasionally exceed 100%. Moreover, the borrower also considers local state regulations before offering the loan. However, they are very short and you must pay back on the next payday except you take up another loan.

Do cash advances hurt your credit score?

Cash advances does not have direct impact on your credit score, like we discussed earlier, it could have a say indirectly, by impacting factors required for estimating your score. Foremost, taking a cash advance increases your outstanding bill and increases your credit utilization ration which is used in calculating your score.

Secondly, cash advance always comes with very high interest rates, which may prove very hard to pay. In the situation you are unable to pay timely, it could impact on your credit score. Worse is, the cash advance could take over your credit limit.