Cash advance, in Colorado, is a short term loan given by a lender. The lender could be an individual or a bank. However, cash advance, in Colorado, is not only cash loans. It could also come as a credit card cash advance. In fact, there are several types of cash advance in Colorado and they are credit card cash advances, merchant cash advances, and payday loans.

You may be in need of quick funds to carry out a project or to make a quick purchase. A friend of yours may be relocating and he decides to sell some of his personal items at a giveaway price. In that kind of situation, you will need fast money. You could also need some money to offset the medical bill of your kid or your own medical bill. Fast approval and quick access to funds are the two major reasons people love taking cash advance in Colorado.

Types of cash advance in Colorado

Credit Card Cash Advances

Credit card cash advance is the most popular cash advance in Colorado. What makes it popular is easy application and quick approval. You can apply for most Colorado loans online but credit card cash advances are faster. It can be withdrawn from ATM or from the bank with a check.

The only problem with this type of cash advance is high interest rate. Of course, everyone that applies for Colorado loans online knows that they will pay some interest but credit cash advance comes with about 24% interest rate. The interest starts accruing from the very first day and it does not also have any grace period. In addition, you may also pay a small usage fee if you collect the cash from an ATM.

Merchant Cash Advances

People who run online stores or any other online business can also apply for Colorado loans online. Merchant cash advances are the loans companies get from banks or other lender to finance their business activities. The loans are usually paid with the revenue generated from sales. Before approving the loan, many money lenders in Colorado will check several data points to assess the creditworthiness of any company that applies for Colorado loans online.

Payday loans

A lot of people also apply for Colorado loans online and they pay the loan back on their payday. This kind of loan is known as the payday loan. This kind of loan ranges from $50 to about $1,000. On the average, they come with about 15% fee. The interest rate of the loan is usually very high. You may pay as much as 100% interest rate. No matter how much it is, it must be paid back on the borrower’s next payday. However, the loan can be extended and this comes with additional interest. Most lenders in Colorado will have borrowers tender a postdated check in the sum of the loan taken as well as its interest.

In addition, the borrower will also have to sign an automatic repayment agreement. So, once the borrower’s pay hits his account, the loan will be paid to the lender. To be sure that the borrower has the financial ability and capacity to repay the loan, lenders may also ask for proof of income and personal identification. Some employers sometimes offer payday loan to their employees without charging any interest.

Popular lenders across Colorado

Cash advances have an impact on your credit score

While cash advances do not have direct impact on your credit score, they do have indirect impact on it. This is why you need to be careful when applying for cash advances. They increase your credit utilization ratio and when it exceeds 40%, it will take a negative toll on your credit score and getting a loan may become difficult.

Pros of cash advance

The major advantage of cash advance is quick access to cash. They say a stitch in time saves nine. There are several situation that requires a little amount of money but could get worse with time. When you or any member of your family is down with a medical condition that his or her health insurance policy does not cover, you need to pay the medical bill from your pocket. Cash advance will help in that situation as the health condition may likely get worse if not treated on time.

In other words, if you have an emergency need for money but have limited resources at the moment. Cash advance could be the best option for you especially when you have a steady source of income.

Cons of cash advances

They are bad for bankruptcy. If you are planning to file for bankruptcy, taking cash advances will not only jeopardize your chances of having your debt forgiven, the act could be seen as fraud. Your card issuer will likely challenge any bankruptcy filing that is immediately after taking cash advance or payday loan.

Using a cash advance to pay bills is not economical at all. The interest rate is not only high, you may also be subjected to daily fees apart from the interest you will pay on the loan. Chances are high that you may end up revolving the debt. Getting out of a vicious circle of debt is very difficult.

Whether it is a cash advance or a payday loan, the interest rates are way too high. Well, if you take the loan for medical expenses, it is okay as no amount is too much to pay to stay healthy. It is not a bad idea to use it for investment or business venture. However, it is not a good idea to take such loans for luxury. You will most likely regret it later.

In summary, taking a payday loan or cash advance is a good idea for certain situations and it is a terrible idea for others.