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cash advance interest calculator

What is a cash advance?

A “cash advance,” or “payday loan,” is a short-term, high interest loan that lets people borrow up to $500 without having to provide collateral. They’re often advertised as being able to help people pay bills, buy groceries, or cover medical costs. But they’re actually designed to trap consumers into a cycle of debt.

When you take out a cash advance, you typically write a check to a lender for the full amount of the loan plus interest. Then, when your next paycheck comes around, the lender cashes it. If you don’t have enough funds in the bank account to cover the check, you’re forced to use the remaining balance of your checking account to pay the loan. This is called a rollover.

The average APR on a cash advance is about 400%, according to the Consumer Financial Protection Bureau. And because most borrowers don’t know how much they’ll end up paying over the course of a month, they usually wind up paying far more than they expected.

If you do decide to apply for a cash advance, here are some tips to keep in mind:

1. Don’t fall victim to misleading ads.

Cash advance companies aren’t regulated by the same agencies that oversee banks and credit unions. So while they may claim to be able to lend you as much as you want, they can charge whatever interest rate they like. Some even advertise zero percent APR, but that doesn’t necessarily mean they won’t try to hit you with fees.

2. Find out exactly how long you’ll have to repay the loan.

Cash advances – the interest rate and fee you’ll pay

A cash advance is when you take out a cash loan against your credit card. You’re essentially borrowing some extra money from yourself. Here are three things to know about cash advances:

1. Interest rates vary depending on where you live.

2. There are fees associated with each transaction.

3. These loans aren’t always easy to get.

How do I calculate the total cost of my cash advance?

Want to know how much a cash advance costs you? You’ll want to start by looking up what your current APR is. Then, take the amount you’re borrowing ($1,000), multiply it by the APR/100, and divide it by 365. This is the number of days it takes to repay the loan. Subtracting that from the original amount borrowed gives you the total interest you’d pay over the course of one year. Now add on the flat fee charged by your lender.

You may also use this cash advance interest calculator by CalculateCreditCard

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