No matter how many preventive measures you take, emergencies still happen. And when they do, it can be a struggle to find a way to cover the costs. If an important bill is due and you lack the funds to pay, a cash loan is one way to ensure your bills get paid on time and you don’t default on your debt. For example, your paycheck gets lost in the mail, but you need to get your car repaired. Rather than waiting for your employer to reissue you a check, you can simply request a cash advance. But what is a direct deposit cash advance loan? And is it the right choice for you? Read on to learn more.
What Is a Direct Deposit Cash Advance?
A direct deposit cash advance is a short-term loan deposited directly into your bank account. It’s a convenient option for those looking to borrow money to weather a temporary emergency.
You decide where you would like the money deposited, as funds can be transferred into either a checking or savings account. The deposit appears in your account in as little as a day or two—no need to wait for a check to be mailed—making it both fast and convenient.
A similar process occurs when the loan payment is due. On the repayment due date, the lending institution withdraws the payment amount from the same bank account used for the deposit.
Automatic repayment works like an automatic withdrawal, making it easy and hassle-free. This also helps you avoid late fees and negative marks on your credit report.
How Does a Direct Deposit Cash Advance Work?
Direct deposit cash advance loans are designed for emergencies. They work best for situations that call for a small, short-term loan. To be approved, you’ll need a bank account and proof of employment. You can also use your Social Security as proof of income, so long as it amounts to more than $800 per month.
You can apply for a direct deposit cash advance online and have the money deposited directly into your bank account. This can take as little as one business day.
When to Consider Getting a Direct Deposit Cash Advance
A direct deposit cash advance should be reserved for urgent situations, as it is designed to bridge a gap between pay periods or cover an unexpected expense.
- Car repairs
- Medical emergencies
- Home repairs like a leaky roof or plumbing issue
- Unexpected school costs
- Emergency dental visits
These loans should be considered a short-term fix rather than a long-term solution. You only want to sign up for this type of loan if you can pay it back quickly and easily.
How to Get a Direct Deposit Cash Advance
One benefit of a direct deposit cash advance is that you don’t need a high credit score to get one. In fact, your credit score isn’t even considered during the application process.
Here is what you’ll need when applying:
- A valid Texas driver’s license or photo ID with current address
- Proof you have a steady income
- Proof you have a bank account
- A valid phone number
Your bank account will need to have been active for a month or more, and you will need to have been at your current position for at least three months to be approved for the loan. Additionally, your monthly income must be $1,000 or more for direct deposit cash advances.
When researching loan options, be thorough. Go beyond an internet search of what is a direct deposit cash advance, and read all the fine print. Remember: Direct deposit cash advances are best used sparingly and only for short-term problems. They require a prompt, on-time repayment, or you could face added charges and fees. Call your lending institution and have someone walk you through all the associated fees and payback options. This will ensure that your choice will be the right one for you and your particular financial situation.