Running short on funds prior to payday has happened to many people out there. The stressful event can leave you scrambling for money on short notice, which may lead you to a solution like debit card loans. Wondering what a debit card loan is? We’ve got everything you need to know about this type of loan below, including how it may benefit you and what your alternatives are.
What is a debit card loan?
A debit card loan is when a cash advance is distributed to you via a debit card. So, after the loan is approved, the funds will be available on the debit card to use almost immediately, skipping processing times like lengthy transfers. While cash advances can be given to customers in a variety of formats, the debit card loan allows for speedy access with minimal hassle.
How a debit card loan works
When you go to a lender for a cash advance, you can ask for your options to receive the funds. In the case that they offer a debit card loan, you would go through a typical process of qualifying for the loan and, once approved, have those funds placed on a debit card for use.
Benefits of a debit card loan
There are several benefits to opting for a debit card loan. These are some to note:
When you’re looking for funds as soon as possible, debit card loans can sometimes mean same-day funds, if not one to two days. This certainly beats the lengthy waiting time for other methods such as transfers which can take multiple days, even longer on holidays or weekends!
Online & brick-and-mortar
Whether you prefer to deal with your finances online or in person, companies that offer a debit card loan benefit can be found in both places. In addition to finding which company is willing to work with you, you can check on their rates and circumstances prior to agreeing.
Alternatives to debit card loans
While debit card loans can be a helpful option, they’re not the only ones. Here are a few alternatives to consider:
Because debit card loans can be expensive with the associated fees, other cash advances may be an appropriate alternative. Other methods, like a traditional transfer, can get you the funds you need without the high associated fees. Plus, cash advances may also permit more flexible repayment terms.
Title loans can be a great option for money if you do not have great credit or need better loan terms. With these loans, you’ll need to put your car up as collateral in order to act as insurance for any lender in the case that you do not pay the loan back. In the case that you don’t repay the loan, the lender can seize your vehicle via its title. So, make sure you can pay back this loan before applying.
Lines of credit
With a line of credit, you can borrow funds whenever you need to, up to your set credit limit. These flexible loans let you pay back what you owe all at once or over time, and you’ll only pay interest on the amount you borrow.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.