Image via Wikipediacash advance loan is. This type of loan is only for short term cash emergencies and not designed as solutions for long term financial problems. Cash advance loans are good for those who have bad credit scores and were rejected by traditional financial institutions, such as banks. Even if the credit score is low, it should not be a problem.
When the financial crisis hit the Australian economy, many people found themselves near the brink of bankruptcy. A lot of them also incurred bad credit ratings. This caused a lot of financial problems, particularly when people need to get loans fast. The typical scenario is that traditional, office-based lending institutions would first check the borrower's credit history. They would asses the borrowers’ financial standing if they have the capability to payback the loan on time in the next payday. Not only that, but the lenders also check if the borrowers are diligent in paying previous loans on time. If they fail in these meticulous credit checks, the lenders usually deny the loan applications.
Depending on different lending companies, cash advance loans vary in terms and conditions. Cash advance loan creditors are usually more lenient and less stringent to borrowers. If a person is a regular employee with a fixed income and has a bank account, chances are, he or she would be easily approved for a cash advance.
There are also limitations to cash advance loans. For instance, lending companies limit how much a person can borrow, depending on one’s income or salary. These firms also give higher than usual interest rates. This is to compensate for the high risk involved on their investment because they are giving financial support to most borrowers—without credit investigations and collateral—during their time of need. This cash advance is also paid as soon as the next payday arrives, since this is only designed for short term cash flow problems. If a cash advance loan is not paid by the borrower on time, higher charges are used by the lender.
source : http://www.articlesbase.com/loans-articles/cash-advance-loan-facts-1892622.html