If you need to borrow money, you have many borrowing options, including a cash advance or a bank loan. Both allow you to borrow money to cover financial emergencies, but the requirements, approval process, borrowing amounts, and other details differ.
In this guide from Texas Car Title and Payday Loan Services, Inc., we will explain the differences between a cash advance and a bank loan. We will go into when to choose a cash advance over a bank loan and the fast process for getting approved.
Explaining Cash Advances And Bank Loans
When faced with a financial emergency you cannot afford, two of the options you have for emergency financing are cash advances and bank loans. These financial products differ in significant ways, making one potentially more appealing than the other in certain situations. Before divulging the differences, it’s essential to understand what these loans are and how they work.
Learn the definitions of these loans below:
- Cash advance – Otherwise known as a payday loan, this is a short-term loan that allows you to borrow a few hundred dollars from a future paycheck to fund minor emergencies. It's made with bad credit borrowers in mind, ensuring you always have an easy way to access funds when you need them most, and is repaid in one go on your next payday.
- Bank loan – This is a secured or unsecured loan that provides a lump sum of cash. You will have to work with a traditional banking institution, so terms can vary depending on who you work with. Getting approved for a bank loan usually takes a few weeks and requires good credit and a long list of requirements.
5 Differences Between Cash Advances And Bank Loans
The differences between cash advances and bank loans are plentiful. From loan amounts to ease of access to processes and beyond, you will certainly find more differences than similarities. Learning about these differences can give you a hint as to which can help with your emergency situation.
The following are five differences between cash advances and bank loans:
1. Loan Amounts
With a cash advance from us at Texas Car Title and Payday Loan Services Inc., you can borrow between $100 and $1,200. How much you can borrow will depend on your income level and ability to repay the loan.
However, a personal loan from a bank typically comes with a much higher lending limit. Even though every lender will set their own limits, most banks will allow you to borrow between $1,000 and $100,000. Borrowers with excellent credit (above 750) who use collateral to secure the loan will get approved for more.
Note: While personal loans do have higher lending limits, there are options when you want to borrow a smaller amount. Many banks have smaller personal loan options.
2. Credit Requirements
Payday loans are made with ease of access in mind. You don't have to contend with long requirements lists, and there's no need to have a near-perfect credit score. We allow borrowers to receive a cash advance for bad credit as long as they can prove their income and can afford repayment.
Bank loans, on the other hand, are notoriously tricky, especially if you have poor credit or have yet to build a reliable financial history. You have to meet stringent requirements, prepare a bunch of documents, and have exceptional credit to qualify for the best terms and higher amounts. Borrowers with bad credit will not be accepted, so you must have at least a 700 credit score to qualify.
3. Requirements
Bank loans come with a myriad of requirements that you must meet in order to gain approval. You will need your pay stub, ID, banking info, proof of address, collateral, and more to get approved. You won’t have to worry about what with a cash advance, as we have a simple list of requirements you need to meet.
Here are the cash advance requirements:
- Pay stub — We use your most recent pay stub to establish your ability to repay the loan.
- Identification — We accept all primary forms of identification displaying your full legal name, date of birth, and portrait photograph. This includes your driver's license, passport, military servicemember's ID card, and student ID card. You must be at least 18 years old to acquire a payday loan.
- Blank check — The blank check must be linked to an open and active checking account in your name. If not, we won't be able to process your cash advance request.
4. Approval Process
Bank loans often come with prequalification, allowing you to gather multiple loan offers before committing to one.
After that, you will formally apply for the loan. At this stage, you will be asked for information about yourself, your finances, and the loan you wish to receive. You'll also be asked to submit supporting documentation, like pay stubs, identification, and more, so the bank can run a hard credit check before providing its final decision. This whole process can take days or weeks.
A cash advance doesn't come with this arduous process. Instead, the in-person portion can take as little as 30 minutes, and you only need to provide a few documents to support your information.
Here's how to apply for a Texas cash advance online:
- Fill out the simple request form on this website and submit it. Since we ask for basic information only, this should only take a few moments. You will need to provide your name, zip code, email address, and phone number.
- Wait for one of our representatives to give you a call. We will discuss the process and requirements and answer any of your questions.
- After the phone call, head to your nearest Texas Car Title and Payday Loan store location with your required items.
- When you arrive, we will greet you and sit down to evaluate your documents to see if we can offer you a payday loan. If you are approved, we will let you know how much you can borrow within our lending limits — $100 to $1,200.
- As long as you are happy with the amount, we will walk you through the final stages of the process, which include signing some paperwork. If you're unsure about anything, ask us before you sign to ensure you're fully informed before committing to the agreement.
- You will receive the amount you qualified for later that day or by the next business day.
5. Repayment Timeline
Bank loans require repayment over months or years. You'll repay a fixed amount each month until your balance is fully paid off. With payday loans, you don't have to worry about meeting monthly repayments. Instead, you repay them in one go with your next paycheck.
That said, you must always clarify repayment terms and timelines with your specific branch (the same goes for bank loans, too). Our terms vary by location, so always read your loan documents carefully and consult with a representative before signing your contract to ensure you can meet the repayment date.
When To Choose A Cash Advance Over A Bank Loan
Typically, you would choose a payday loan over a personal loan in urgent financial situations, such as home damage, car breakdowns, medical bills, or veterinary fees. Their ease of access, quick application processes, and simple requirements mean they're a faster, more seamless option during emergencies.
You should also choose a cash advance over a bank loan if you have bad credit. Any credit score below 700 is unlikely to be accepted by a traditional bank. However, you can get approved for a payday loan with poor credit.
If you need fast emergency financing with bad credit, a cash advance is a better option than a bank loan.
Get A Cash Advance In Texas – Borrow Up To $1,200 Today!
Do you need fast emergency financing for unexpected expenses today? Let Texas Car Title and Payday Loan Services, Inc. help with our cash advances. You can get approved faster than a bank loan, and you won’t need to prove you have high credit to get approved. Borrow up to $1,200 today. Fill out our online cash advance form and get approved in person in less than 30 minutes!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
