Even the most fiscally responsible people can find themselves struggling to pay bills on time should they be hit with an unexpected emergency. This is especially true of entrepreneurs, who may hit rough patches early on in their journey; poor timing may mean that you’re expected to pay bills before your own invoices are fulfilled, and you’ll need something to tide you over before you have cash in hand.
When you need cash quickly, there are several options available to you. Two popular choices are traditional cash advances and bank cash advances. While both options can provide you with the funds you need, there are some significant benefits to choosing a bank cash advance over a more traditional cash advance.
What’s a bank cash advance?
A bank cash advance is a type of loan that you can get from your bank or credit union; the amount of the loan is based on your credit score and your current financial situation. Unlike traditional cash advances, bank cash advances are typically unsecured, meaning you don’t need to put up any collateral to secure the loan.
Now that we understand what this particular service is, let’s look at some of the reasons why a bank cash advance can be so helpful should you find yourself with a limited cash flow.
Bank cash advances have lower interest rates
One of the most significant benefits of a bank cash advance is the lower interest rate. Traditional cash advances often come with high interest rates, which can make it difficult to pay off the loan. In contrast, bank cash advances typically have much lower interest rates, and some, like those offered by Varo Bank, charge no interest at all. This means you’ll pay less in interest over the life of the loan.
There may be a longer repayment term
Another benefit of bank cash advances is that they often come with longer repayment terms. Traditional cash advances are typically due in full within a few weeks, which can make it difficult to come up with the necessary funds. Bank cash advances, on the other hand, may have longer repayment terms, which can make it easier to manage your finances and pay off the loan over time.
You’ll get better customer service
Banks and credit unions are known for their excellent customer service, and this extends to their cash advance services as well. When you work with a bank or credit union for your cash advance needs, you can expect personalized attention and excellent support throughout the loan process. This can be particularly helpful if you have questions or concerns about your loan or need assistance with your payments.
There are much lower fees for a bank cash advance
In addition to lower interest rates, bank cash advances also typically come with lower fees than traditional cash advances. Traditional cash advances often have high fees associated with them, which can add up quickly and make it difficult to pay off the loan. Bank cash advances, on the other hand, may have lower fees or no fees at all, making it easier to manage the cost of the loan.
Paying your bank cash advance on time may even improve your credit score
Another benefit of bank cash advances is that they can help improve your credit score. When you take out a bank cash advance and make your payments on time, it can help build your credit score and demonstrate to lenders that you are a responsible borrower. This can be particularly helpful if you need to take out a larger loan in the future, such as a mortgage or car loan.
You’ll have access to other services as well
Finally, when you work with a bank or credit union for your cash advance needs, you also gain access to a range of other banking services. This can include checking and savings accounts, credit cards, and investment options. Having access to these services can help you better manage your finances and improve your overall financial well-being.
While traditional cash advances can be a quick way to get the cash you need, they often come with high fees and interest rates that can make it difficult to pay off the loan. Bank cash advances, on the other hand, offer lower interest rates, longer repayment terms, better customer service, lower fees, improved credit scores, and access to other banking services.
If you need cash quickly, consider working with your bank or credit union to see if a bank cash advance is right for you.