Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 6, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

Cash advances can potentially affect a borrower’s credit score. This is true despite the fact that lenders do not check credit histories or require high credit scores from applicants. While applying for a cash advance doesn’t result in an immediate change to a credit score, if a borrower defaults on their payments it can result in damage.

In the event of a default, a cash advance lender may notify credit agencies about the borrower’s failure to repay their debt. As a result a borrower’s credit score may go down. A lowered credit score can cause a number of problems for a borrower.

Credit scores shed light on whether a person is financially trustworthy or not. Naturally, lenders will be hesitant to give money to a borrower that has proven to be prone to defaulting. As a result, people who default often may have difficulty obtaining approval for financing in the future. This can be especially problematic for consumers looking to borrow money towards the purchase of a home or vehicle.

Cash advances carry very high interest rates which can sometimes be in excess of 100 percent annually. This is because lenders do not conduct credit checks before lending money to a borrower. In fact, some lenders just require that a borrower have a checking account. Cash advances can prove difficult to repay due to these high interest rates. This can lead to borrowers defaulting on their payments, which is one reason that lenders protect themselves with high interest rates. On top of that, many lenders charge fees for failing to pay on time or for wanting to rollover the balance.

In order to avoid credit problems, borrowers should be cautious about how much of a cash advance they request. Borrowers should evaluate their income levels to make sure they can afford to repay any debt they incur. Understanding personal finances allows borrowers to avoid worrying about their credit scores.