Cash Advances 101: Glossary Terms you Should Know

Cash advances, like any other type of loan, are laden with verbiage that many people may have trouble deciphering.

Your ability to make a wise, educated decision regarding your cash advance options, however, relies on understanding the terms and condition of the loan and of the contract. In other words, you must never enter into an agreement that you don't understand. Instead, educate yourself, brush up on your loan terms, and ask questions if you don't understand the terms fully.

The following list of glossary terms may be able to help guide you when researching your cash advance options:

Accrue - A term used to describe an accumulation of interest on a loan. Your interest will likely accrue daily on a cash advance loan, so it is always in your best interest to pay off the loan as soon as possible.

Average Daily Balance - An average daily balance is the process in which many companies calculate finance charges. The average daily balance is calculated by taking the outstanding balance on each day and dividing by the number of days in the billing period.

Balance - Your balance is the total amount of money owed on a loan. The balance of your loan may be rolled over into another cash advance, if necessary, or may be paid off in full during within the term of the loan.

Balance Transfer - The process of moving an old debt to a new loan or credit card. It is not uncommon for borrowers to use a balance transfer when combining cash advance loans.
Borrower - Borrower is another name for a loan applicant. You will be referred to as a borrower when you apply for a cash advance loan.

Cash Advance Loan - A cash advance loan is a short-term loan that is secured on your next paycheck. It is also referred to as a payday loan.

Collateral - Collateral is property that is used to secure a loan. Cash advance loans do not require collateral because they are considered personal loans. Other types of loan, also known as secured loans, require collateral to secure the loan. Homes are often used as collateral for home equity loans or lines of credit.

Default - This term is used to describe a borrower who defaults on the terms of a loan. You will likely incur additional expenses and fees if you default on a cash advance loan.
Direct Deposit - This is the process of electronically transferring funds into a bank account. Many cash advance companies are able to directly deposit your loan directly into your checking account.

Interest - Interest is the additional amount charged on the principal of a loan.

Finance Charge - Finance charge is the total dollar amount charged by a lender for a loan.

Loan - This refers to the total money borrowed from an individual or organization.

Payday Loan - A payday loan is a short-term loan that is secured on your next paycheck. It is also referred to as a cash advance loan.

Principal - The principal is the amount of the loan, minus the finance charges.

Term - Term is the time in which you must repay a loan.

Wire Transfer - Wire transfer is the process of electronically moving funds from one account to another.

Learn more about how a cash advance can help you through any financial difficulty. Take advantage of PayDayOne 's online cash advance to affordably and quickly obtain the funds you need before your next pay check arrives.