Cash Advance

1. What Is Cash Advance

A cash advance is any type of loan facility that allows you to quickly obtain cash for spending. Generally, a cash advance facility is able to make funds available to you within seconds, or over a maximum of two business days, and are among the most expensive modes of financing available in Australia.

2. Types Of Cash Advance

There are a few types of cash advance facilities available in Australia, including payday loans, credit card cash advance, and bank overdraft. Each option carries a variable interest expense. Although payday loans require application and approval, a cash advance obtained on a credit card or through bank overdraft is usually pre-approved and readily available for withdrawal.

3. Eligibility Criteria

To be eligible for a cash advance, applicants must:

Be over the age of 18.

Have a regular income, more than 50% should come from non-Centrelink sources.

Prove sufficient affordability to make timely repayments.

These criteria are only relevant when applying for a payday loan cash advance. In other cases, such as a credit card and bank overdraft, you will probably be pre-approved for the cash advance facility.

4. Examples Of Cash Advance

Type Of Cash Advance

Maximum Amount Available

Turnaround Time

Charges, Rates, And Fees

Payday Loans

$2,000

One hour or same day disbursement

20% loan establishment fee and 4% monthly fee on the principal loan amount

Credit Card Cash Advance

Variable, pre-approved limit by the credit card provider

Instantaneous

An interest rate of between 9%-22% per annum is applied, plus some additional fees

Bank Overdraft

Variable, pre-approved limit as set by your bank

Instantaneous

Variable, depending upon the terms and conditions as set by the bank

5. Advantages and Disadvantages

Advantages

Instant cash availability to pay for urgent expenses (in case of credit card and overdraft).

Easy and fast application process (in case of payday loans).

Funds can be used for any purpose.

Does not require submission of any collateral.

Disadvantages

Expensive mode of finance.

Application Process

As far as credit card and bank overdraft cash advance facilities are concerned, these are pre-approved and don’t require any application.

To apply for a payday loan cash advance, applicants must go on the website of their chosen payday loan cash advance provider and fill out the online application form, submitting all required documentation.

Once the lender has received your application and supporting documents, it will evaluate your affordability against the desired advance amount and either approve or reject your application. If approved, the funds should reach you within one business day.

FAQs

1 - How much can I borrow under a cash loan?

The maximum you can borrow under a payday loan cash advance is $2,000, although some lenders might be willing to offer higher amounts. For a cash advance facility linked to your credit card or provided as a bank overdraft, the maximum borrowing limit would be decided by the lender.

2 - Can a cash advance hurt my credit rating?

Yes, if you fail to make timely repayments on your cash advance loan, it will have an adverse impact on your credit score.

3 - How much does a cash advance cost?

The cost applied to a cash advance varies depending on your chosen mode of financing. A payday loan may be the most expensive cash advance option, while a cash advance obtained through a credit card might charge anywhere between 9% to 22% per annum. A bank overdraft cash advance might be the cheapest option available, depending upon the terms and conditions set by your bank.