Cash Advances vs. Installment Loans in Alabama

Sometimes we have to make an unexpected visit to the mechanic, a quick trip to the vet, or we simply just need extra money to enjoy a nice vacation. And sometimes we hit roadblocks while in search for getting the help we need.

But getting your hands on the best loan option available doesn’t have to be a daunting process. Below, we’re exploring the differences between Alabama cash advances and installment loans – two loans you may find to be viable options when it comes to getting out of a rut or gaining the flexibility to help you meet your short term financial needs.

cash-advance-vs-installment-loans-in-alabama

Cash Advances

Cash advances, also known as payday loans, are a simple yet affordable way to help anyone through a short term financial crisis. These loans are short-term loans of $500 or less intended to assist you during financial hardships until your next payday.

WHO GETS THESE AND TYPICALLY WHEN:

Since cash advance lenders usually care more about your ability to repay than your credit history, these loans usually turn out to be a great option for any customer, even if you have limited credit and need a leg up to cover an unexpected expense until your next payday.

FEES AND DISCLAIMERS:

Fees vary depending on state regulations. In Alabama, the fee associated with payday loans or cash advance loans is $17.50 per $100 borrowed. Loans are to be repaid on your next payday whether you get paid once a month or every other week.

Cash advance loans have a reputation of being overly expensive. However, in most cases this 2 to 4 week loan is cheaper than bouncing a check, paying credit card late fees, or paying utility reconnect fees.

You may also renew the loan after the full amount has been paid. However, if the loan is continuously renewed, it can be expensive as the annual percentage rate of a payday loan in Alabama is 456.25%.

HOW TO APPLY:

With a cash advance, you can usually walk in and out in often less than 30 minutes. Just bring a recent bank statement, proof of income, proof of residence (utility bill, lease); state issued ID, social security verification, and complete a written application.

You will be asked to write a personal check for the loan amount and small fee, and the lender will hold that check as collateral until your next payday. If you don’t have a personal checkbook, some lenders like Always Money can now print one for you using your checking account information.

APPROVAL PROCESS:

Some states have created certain statutes that may interfere with the ability to get approved for a loan. For example, in Alabama state law prohibits anyone from having more than $500 in cash advance loans statewide outstanding at one time.

In order to get approved for a cash advance, lenders enter your information into a POS to check the state database (Veritec) and check the loan eligibility. This same POS also checks certain credit criteria to determine loan approval and the loan amount. If approved, you will receive the cash you need on the spot.
Installment Loan

 

A consumer installment loan is a personal loan that can be backed with or without collateral and is repaid over a set period of time. Unsecured installment loans or personal loans are usually available from $125 to $1,500, while installment loans secured with collateral can go up to $15,000 (or more) in some states. Collateral can include such things as the title to your vehicle, boat, ATV, or construction equipment to name a few.

WHO GETS THESE AND TYPICALLY WHEN:

Since this loan is based on your income and other debt obligations, installment loans usually work best for those with established credit histories who need a larger-sized loan and are able to repay the loan in increments over a set period of time.

FEES AND DISCLAIMERS:

Unsecured consumer installment loans typically have a term between 3 to 18 months. Unlike cash advance loans, consumer installment loans in Alabama have a set due date once a month until the loan is repaid in full. Interest rates vary depending on the amount owed, the terms of the loan, and certain credit criteria. The secured installment loans interest rates vary depending on credit history.

HOW TO APPLY:

If you’re looking to apply for a consumer installment loan, you will be asked to complete a short credit application as well as bring in the following documentation: proof of income, proof of residence, bank account statement, social security verification, and state issued ID. In some cases a personal check may be required as collateral.

 

APPROVAL PROCESS:

In order to get approved for an installment loan, lenders will enter your information into a POS to check the state database (Veritec) and check the loan eligibility. This same POS also checks certain credit criteria to determine loan approval and the loan amount. If approved, you will receive the money you need on the spot.

 

 

Still can’t decide which loan is best for you? Get your questions answered at Always Money, a regional leader for over 20 years in affordable short-term credit solutions. Always Money understands that financial hardships happen, which is why they have streamlined the process and made it very easy to get started. Stop by an Always Money location near you to complete a simple application or call 1-888-618-9217 during normal business hours and you may get pre-approved over the phone.

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