Cash Advance and Alternatives Fees Revealed

Ray Prince
Last Update: October 18, 2023 Loans

The need for quick emergency cash has never been greater in today’s inflationary environment. One way to avoid unexpected expenses is through cash advances, traditional payday loans, and instant online payday loans. However, it is essential to note that many fees can cut into a loan’s APR, making total borrowing costs higher than expected.

Fortunately, Elite Personal Finance is here to help you understand cash advance fees and fees from alternative loan options so that you can make the best financial decision possible. Each fee will be covered in detail, including how much it can be, what it pays for, types of fees for various loan types, and how to avoid them. Whether it’s overdraft protection, account maintenance, ATM withdrawal, wire transfer, or late/insufficient funds fees, we provide in-depth explanations so that you become a better informed borrower on your next loan.

What Is A Cash Advance?

Cash advances are a way for anyone to quickly obtain emergency cash via online lenders, ATMs, or borrowing against your existing credit line. They provide immediate access to cash rather than following a traditional loan process.

Several lending institutions offer cash advances, including but not limited to payday loan companies, specialized online lenders, and 0% interest cash advance apps like Earnin and Brigit, which award you with your future earnings, taking its loan back with your next paycheck.

One of the biggest benefits of cash advances is speed. Often you can receive funds the same day, making it an excellent choice for urgent, unexpected expenses.

Today, there are two ways you can obtain cash advances. The first is via an online lender/smartphone app, and the other is at an in-person location like your local cash advance place. Qualification criteria are minimal, only requiring your basic personal information and proof of income along with optional post-dated checks or the borrower’s permission to issue authorized electronic withdrawals by lenders.

Expect repayment terms on cash advances to range from a few weeks to several months, depending on the lender. They can also extend or rollover the repayment for a fee of up to $79.

Let’s learn how cash advance work and investigate the different loan types that offer cash advances and all associated fees and penalties.

How Do Cash Advances Work?

The process of how cash advances work is pretty straightforward. For starters, a borrower visits an online payday lender or local cash advance place, requesting an application and providing all personal details, including income, employment, and deposit instructions.

From there, cash advance lenders perform a verification process, requesting supporting documentation to verify your employment, such as pay stubs, bank statements, or electronic timesheets, so that they know that you are collecting a regular income.

Assuming instant approval, cash advance companies will then issue you a loan agreement with all terms and conditions, including the amount, APR, repayment term, and all applicable fees, which may include application, origination or prepayment penalties.

To secure the loan, your local cash advance place may require that you issue a post-dated check for the total amount borrowed plus all applicable finance charges and interest, which is cashed out by the lender on your next payday.

Once a loan agreement is signed, cash advance places typically disburse cash (minus any fees) by depositing your postdated check or performing an electronic authorized withdrawal from your bank account. If you have close to a $0 balance, then you can expect to be charged an insufficient funds fee by your bank (in addition to any penalties by the lender).

We highly advise that you refrain from taking out traditional payday loans thanks to their outrageous 400% APRs, costly extension/rollover fees, and the potential for third-party fees like the one mentioned above.

Fortunately, many alternative options to instant cash advances exist from reputable online marketplaces like MoneyMutual and ZippyLoan, which we will cover more in depth below.

Unlike traditional payday loans, instant online cash advances from these non-direct lenders come with competitive rates and terms, starting with sub 35.99% APRs, repayment terms as long as 60 months, and no origination or prepayment penalties to further pit you in a debt cycle.

Additionally, these online marketplaces provide a secure, 256-bit SSL-encrypted online form to keep your information safe. Combined with transparent disclaimers, proper security protocols, and Online Lenders Alliance (OLA) membership, you can have a high degree of confidence that your instant approval online cash advances will not be predatory.

What Are Credit Card Cash Advances?

Cash advances allow you to borrow a specific percentage against your credit card’s limit. For example, if your credit card limit is $10,000 and your cash advance’s max borrowing limit is 50%, you can request up to $5,000.

With cash advances, credit card holders can expect to pay a fee that is a percentage of the amount withdrawn or a set rate. Expect higher than average interest rates versus credit card purchases. One of the primary differences is that credit card cash advances do not offer grace periods, meaning you will pay immediate interest once you have withdrawn the cash.

There are several ways you can take out credit card cash advances. The first is through an ATM with a provided PIN code, and the second is through a branch location where you can request a cash advance from the teller. You must show proof of ID and credit card to facilitate the credit card cash advance.

What Are Traditional Cash Advance Fees? 

If you visit your local cash advance place, traditional fees may include a combination of origination and prepayment penalties. Origination fees cover loan administrative costs. Most direct lenders from reputable lending networks like MoneyMutual and 100Lenders do not charge origination fees. However, some FundsJoy direct lenders may charge origination fees of up to 5%, so we encourage you to avoid them.

Another type of fee to remember with cash advances is prepayment penalties. Sometimes you may be penalized for paying off the loan early, as lenders have lost income earned via interest charges. The longer the loan, the more interest charges cash advance companies make.

A third type of fee you can expect with traditional cash advances is a rollover or extension fee. If you want to extend your repayment termination by two weeks, you may have to pay as high as $49 for the privilege of doing so.

If you ever find yourself taking out a rollover or extension, it is probably a sign that you do not know how to manage debt responsibly. One of the main points of taking out cash advances is that they are repaid in full as soon as possible to avoid entering a vicious cycle of debt.

By understanding the fees associated with cash advances, you will be better equipped to know if a cash advance is worth taking out.

What Are The Best And Cheaper Cash Advance Alternatives?

Plenty of viable options are available if you would rather avoid the higher-than-average interest rates and shorter repayment terms offered by traditional cash advances.

Each option has its strengths concerning borrowing limits, repayment terms, and pricing models/fee structure.

Let’s dive deep into three types: personal loans for bad credit, Buy Now, Pay Later (BNPL), 0% interest cash advance apps, and payday alternative loans.

Personal Loans for Bad Credit. If you have a credit score in the 300 to 580 range, you can benefit from a personal loan for bad credit.

They are characterized by higher-than-average interest rates of up to 35.99% and more flexible repayment terms than traditional payday loans, auto title loans, and pawnshop loans.

Personal loans for bad credit provide quick access to funds, whereas traditional lenders like banks and credit unions can take several business days to issue funds. Consider them good for all purposes, from home renovations to emergency bills.

Some personal loans for bad credit companies are willing to report on-time payments or credit bureaus. The more you make timely payments, the higher your credit score and the more likely you can benefit from lower interest rates and longer repayment terms.

BNPL. The number one thing about BNPL services is that it allows you to purchase items you usually wouldn’t otherwise. By paying a smaller upfront payment and fixed equal installments over six weeks for items at participating e-commerce retailers, borrowers enjoy easy and convenient checkout processes, 0% interest, flexible payment options, and the ability to build their credit history.

Another underrated thing BNPL providers are good for is increasing conversion rates. By splitting purchases into fixed installments, businesses can better drive revenue with a higher conversion rate by consumers towards purchases. Another aspect is that it makes things easier for businesses, as it’s up to the BNPL provider (not the business) to collect payments from customers and manage the collections process if customers do not repay on time.

Remember the increased average order value. By making payments in installments, consumers are more likely to consider and pay for higher-priced items at participating retailers.

Three of the most popular services include Affirm, Afterpay, and Klarna. All offer similar programs with easy-to-use smartphone apps and have an impressive roster of top e-commerce retailers like Target, Walmart, and Amazon.

0% Interest Cash Advance Apps. If you want to cover paycheck gaps, our favorite options are 0% interest cash advance apps like Earnin, Brigit, and Dave.

They offer cash advances of up to $100 per day or $750 per period with two to four-week repayment terms, which means funds are automatically withdrawn from a valid bank account on your next payday. There are some downsides, primarily because these apps offer much lower borrowing limits with shorter repayment terms, making it harder for someone who needs more financial discipline to pay it on time.

One other 0% interest cash advance app we highly recommend is Albert. This all-in-one platform offers cash advances of up to $500, a financial insights tool, automated savings features, and even a built-in brokerage where you can invest starting with little money. If you want to expand your scope beyond cash advances, we highly recommend Albert.

Credit Unions (PALs). Another excellent short-term cash advance option is a payday alternative loan from a credit union. They offer much more reasonable terms and lower fees than traditional payday loans.

For starters, payday alternative loan limits range from $200 to $2,000 with one to 12-month repayment terms, depending on the credit union’s policies. As for application fees, expect to pay up to $20, which goes towards overhead and administrative costs.

However, one of the biggest benefits of payday alternative loans is their max 28% APRs, which may or may not include additional loan fees.

Remember, the best credit unions also offer financial counseling services. They are an excellent treasure trove of information about how to build credit, improve your financial standing, and become a more informed consumer. Since credit unions are designed as non-profit organizations, more emphasis is paid to the financial education and resources portion.

To qualify for payday alternative loans, you must be a credit union member, hit a tenure mark (e.g., 90 days), and provide proof of income and employment through pay stubs, bank statements, or electronic timesheets. Additionally, you may need to provide a credit score, although PALs emphasize those with limited to no credit history.

Keep in mind that credit union eligibility depends on the institution. To learn more about credit union-specific PAL programs, visit their website or call their number.

Personal Loans for Bad Credit Fees

Here is a rundown of all of the types of fees you can expect with personal loans for bad credit:

Prepayment Penalty. Suppose you decide to pay off your loan before the end of the loan term. In that case, you may pay a prepayment penalty, compensating lenders for not being able to earn more in interest charges over a longer loan cycle. Be sure to check your loan agreement to ensure that you will not be paying this.

Late Payment Fee. If you don’t pay your loan by the due date, expect to be charged a late payment fee. Late payment fees can go as high as $39 or a percentage of the outstanding balance.

Insufficient Funds Fee. If your account goes negative, once a cash advance company performs an automatic withdrawal, your bank may issue you an insufficient funds fee of up to $39.

Origination Fee. Some lenders only process your application for a fee. Origination fees are typically detected from the loan amount before proceeds are distributed to you.

In the case of our recommended online lending networks, only FundsJoy and Upstart have some direct lenders that charge origination fees of up to 5% and 8%, respectively. However, they can be easily avoided as you will be presented with several competitive loan offers, many of which do not include these fees.

APRs. APRs for personal bad credit loans typically go from 15% to $35.99%. APRs represent the total cost of borrowing over a year-long period, including interest and all applicable finance charges like origination fees.

To fully understand APRs, let’s apply the maximum APR allowed in the country with a representative loan example consisting of a 35.99% APR, a $10,000 loan with a two-year repayment term. After the two-year repayment term ends, the total cost for the $10,000 loan would be $17,180 ($7,180 in interest charges), which may be too high.

That’s why we highly recommend boosting your credit score before taking out any personal loan for bad credit. A quick 100 point boost can qualify you for fair to reasonable credit rates.

Paycheck Advance App Fees

The fees you can expect with 0% interest cash advance apps depend on the service. For example, Earnin charges of voluntary tip for each transaction of up to $14, and Brigit/Dave charges a monthly membership fee.

Let’s go in-depth into all of the fees you can expect with 0% interest cash advance apps:

Tip Option. Instead of collecting a monthly membership fee, some services may accept tips of up to a certain dollar amount for every advance, regardless of the amount borrowed. Earnin is the most famous example, accepting up to $14 for every transaction.

Membership Fee. Reputable 0% interest cash advances apps like Brigit and Dave offer free and paid membership plans. Brigit’s $9.99 monthly fee pays much more than cash advances with a job search feature, insight into spending habits tools, and a credit builder.

Expediting Fee. If you want to receive your cash advances faster, as early as the same day, then most 0% interest cash advance apps will charge a small expediting fee that goes up or down depending on the amount borrowed.

Cash Advance Fee. If you want to take out a cash advance, you may have to pay for it if no paid membership plan is available.

Buy Now, Pay Later (BNPL) Fees

Here are some of the most common fees associated with BNPL services:

Late Payment Fees. Made for missing scheduled payments, typically a fixed fee or percentage of the balance due.

Administrative Fees. Paid for administrative tasks by the provider, such as account setup and changes made to any repayment plan. Administrative fees can be charged on a flat rate or a recurring basis.

Credit Check Fees. Unfortunately, some BPL Services may conduct credit checks, charging a fee. However, all the most popular BNPL services do not charge separate fees for credit checks.

Insufficient Funds Fees. If a scheduled payment tries to go through, and you have a negative balance on your bank account, then BNPL providers may charge a returned payment fee, which can typically go up to $39.

As with credit unions and banks, review your BNPL terms and conditions to understand all specific fees and get a true sense of the total cost of borrowing. Fee policies vary depending on the service.

Credit Union Fees

Here are all the associated fees with credit union personal loans and payday alternative loans. Note: not all credit unions will charge the same fees:

Membership Fee. Some credit unions charge annual subscription fees to become a member, which helps cover overhead costs, rent, administrators, etc.

Overdraft Fee. Suppose a transaction lands in your credit union checking or savings account and drops it into the negative. In that case, the credit union can charge an overdraft fee of up to $39, which helps cover your account by providing temporary funds.

Maintenance Fee. Some credit unions may charge a maintenance fee in exchange for keeping your checking and or savings account open. They are more likely if you do not own a minimum balance. Like membership fees, these also go towards overhead, administrative, and similar costs.

ATM Fees. You may have to pay a fee if you withdraw cash at an eligible credit union ATM. Expect even to pay a fee for balance inquiries using out-of-network ATMs.

Account Closing Fee. If you withdraw all funds and leave a credit union, some may charge you for exiting, which covers administrative costs and all expenses associated with paperwork.

Insufficient Funds Fee. If you need more funds to cover an incoming check or electronic payment, you may be assessed an insufficient funds fee. Returning a payment takes an administrative hassle, so this is charged.

Wire Transfer Fee. Like any bank, you may also pay a wire transfer fee from domestic and international banks and credit unions.

Make sure to carefully review your credit union terms and conditions so that you understand the total cost of borrowing. Remember that they offer more favorable terms than many online lenders, with no origination fees and excellent interest rates.

Credit Card Cash Advance Fees

Let’s go over all of the different fees associated with credit card cash advances:

Cash Advance Fee. With a credit card, a cash advance is expected to pay a flat fee or percentage of the borrowed amount. One of the most popular fee structures is 5% of the cash advance amount or $10, whichever is greater. This is an administrative type charge separate from the interest rate.

ATM Withdrawal Fee. Anytime you use an ATM to take out a cash advance, expect an ATM withdrawal fee. Your ATM operator, not your credit card issuer, charges this fee, with fees varying depending on the operator. Be sure to check your ATM’s screen for the fee before completing any transaction.

Interest Rate. Like any standard credit card or installment-based loan, credit card cash advances do accrue interest. However, one difference from regular credit card purchases is that interest rates accrue from the first day (as opposed to after your due date like regular credit card transactions), so you are encouraged to repay it as early as possible. Remember, no credit checks are performed with credit card cash advances, so the credit card issuer assumes a higher risk of lending to you.

Finance Charge. Some credit card issuers charge a minimum finance charge, the least interest they are willing to collect. It guarantees they earn some profit, as unfair as it may sound.

Both Personal Loans and PALs

Here are some fees associated with personal loans and payday alternative loans from credit unions:

Origination Fee. This one-time charge starts from some lenders for processing and arranging your loan paperwork. Typically it consists of a percentage of the loan amount. For example, some FundsJoy direct lenders charge origination fees of up to 5%, whereas some Upstart lenders charge up to 8.99%.

Late Payment Fee. You can expect a late payment fee if you do not pay by the due date. There may be a grace period to pay on time before the late fee kicks in. Like origination fees, they also help cover administrative costs associated with processing your late payment.

Loan Modification Fee. If you take out a loan and request a modification at any point, you may have to pay a loan modification fee. Modifications could include changing the repayment term or lowering the interest rate.

Returned Payment Fee. If you do not have enough funds in your account when payment is withdrawn, you may be assessed or return the payment fee. Consider it in the administrative cost of doing paperwork.

Application Fee. Origination and application fees are two terms often used interchangeably. Both pay the cash advance company for processing your loan application.

A Word on Popular Paycheck Advance Apps Earnin’, Brigit, and Dave

Let’s break down fee structures across some of our favorite cash advances and online lending platforms.

Earnin’. Earnin charges voluntary tips and a Lightning Speed fee for expedited, same-day transactions. Earnin accepts voluntary tips of up to $14 for every transaction and charges extra for same-day payment rather than waiting until the next business day. The expediting fee depends on how much you want to borrow.

Brigit. Several fees are associated with Brigit. The first charge is a monthly membership fee of $9.99 for its Brigit Plus program, which includes additional features like extended budgeting tools and quicker cash advances. Additionally, it charges a non-member expediting fee for instant payouts and bank transfer fees when transferring funds from Brigit to your checking account.

Dave. Dave has a membership fee of $1 for a full suite of financial tools such as credit-building services, budgeting tools, and identity theft protection. Depending on the nature of the transaction, you can also expect ATM withdrawal, overdraft protection, or non-sufficient funds fees if Dave cannot cover transactions.

What Are The Pros and Cons of Cash Advances?

Pros

Immediate Cash. All you need to do is visit an ATM and take out a credit card cash advance with a provided PIN. Like 0% interest cash advance apps and local cash advance places, it’s one of the few loan types to offer same day disbursement.

Flexibility. They are typically no spending restrictions when it comes to cash advances. You can use the funds for various purposes, from paying late utility bills to managing an emergency home renovation.

No Credit Check. With most cash advances, there is no minimum required credit score. It’s an excellent choice for people with limited to no credit history. However, it is essential to remember that they have higher than average interest rates with shorter repayment terms, unlike traditional loans from banks and credit unions, with APRs in the 8% to 14% range.

No Loan Applications. By taking out a credit card cash advance, you do not need to complete a loan application that takes longer.

Cons

Impact on Credit Utilization. By borrowing cash against your credit card, you are increasing your credit utilization ratio, which is the ratio of your total available credit limit versus outstanding balances. The higher your credit utilization ratio, the worse your credit score.

Debt Cycle. If you take out consecutive credit card cash advances and fail to repay within two weeks, you can expect to enter a vicious cycle of debt that may be hard to climb off.

Limited Amounts. You may need more than your cash advance limit to cover larger expenses like an overdue hospital invoice or much-needed automotive repair worth several thousand dollars.

How Do I Minimize Cash Advance Fees? 

With some leg work, you can easily avoid credit card cash advance fees to avoid unnecessary debt.

Here are three quick ways you can help minimize credit card cash advance fees:

Negotiate Lower Fees. If you anticipate needing to take out several cash advances over the next few months, do not hesitate to correct your credit card issuer and try to negotiate a lower fee or waive it altogether. If you have a loyal customer for a long time, credit card issuers may be more open to reducing or eliminating fees altogether.

Repay It Immediately. Since interest accrues from the first day with no grace period, we urge you to pay off credit card cash advances as soon as possible, preferably within the same billing cycle. This will help you avoid unnecessary finance charges.

Use Your Bank’s ATM. We recommend withdrawing funds from your bank ATM rather than out-of-network ATMs. If your credit card issuer is associated with your bank, they may not charge ATM withdrawal fees. Unfortunately, taking out international credit card cash advances is difficult, so tread carefully.

By following the three quick tips, you’ll be better positioned to take out credit card cash advances with greater peace of mind.

Frequently Asked Questions

What are the standard fees associated with credit unions?

Some of the most common fees associated with credit unions include overdraft, ATM, wire transfer, account maintenance, and loan application fees.

Do BNPL services charge interest?

Most BNPL services operate using Pay-in-4 models where interest-free installment plans apply for the first six weeks. If you do not pay off the outstanding balance by the end of the period, you will be subject to (potentially higher than average) interest rates.

Are there any upfront fees for personal loans from credit unions?

Yes, it is possible to be charged an application or origination fee from a credit union, typically a percentage of the original loan amount. Check with your credit union to understand all applicable fees and terms.

Where can I get a cash advance?

A cash advance will be obtained in various locations, such as your local cash advance place and online lenders. However, we highly recommend that you only refer to reputable online lenders from pla