Safe Cash Advance For Social Security Recipients

A cash advance for Social Security recipients or Supplemental Security Income (SSI) recipients is a simple way to make ends meet in case of an emergency or large, unexpected payment. Although some lenders only work with people who have traditional paychecks, many offer cash advances for Social Security and SSI recipients.  

Some payday loans marketed to these groups can come with predatory fees and interest rates that create a significant risk of further debt. Below you’ll find safe options and tips to help protect yourself.

Can you get an advance on your SSI check?

For those who rely on SSI checks to make ends meet, security comes in the form of their monthly SSI benefits. But if a medical emergency or sudden oil leak pops up, you can’t always wait until your next check arrives. If you don’t have other savings to cover an emergency, you’ll want to consider other sources of fast cash. 

That’s the moment to consider cash advances for SSI recipients. Many lenders recognize Supplemental Security Income or Social Security checks as an acceptable form of income to get a loan. Others impose restrictions on your ability to borrow. Worse than that, some traditional cash-advance lenders engage in predatory practices that lead to high fees and interest charges on loans, putting SSI recipients at risk.

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What documents do you need to provide when applying for a cash advance?

Required documents to apply for a cash advance vary by lender. Common documents include identification like a driver’s license, state ID card or Social Security card, proof of income, and bank account information for direct deposit.

In this case, your SSI or Social Security award letter can serve as proof of income. Other lenders may ask for your Social Security number to check your credit score. 

How much money can you borrow through a cash advance?

The amount you can borrow varies depending on several factors, including your monthly Social Security or SSI benefit and creditworthiness. Lenders may look at your savings, credit score, credit history, and total income, including Social Security benefits, to determine the amount. 

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How long before you have to repay a cash advance?

Most of the time, you are expected to repay your cash advance on your next payday. You’ll want to make this a priority because it will prevent you from getting caught in a trap of increasing debt. Payday loans are notorious for high APRs that can cause a small debt to spiral out of control. 

With predatory SSI loans or Social Security payday loans, interest and fees could mean having to pay twice as much or more than what you initially borrowed. For most people, there are better options, and it’s best to be wary of cash-advance loans for SSI or Social Security recipients. 

Tips for getting a cash advance for Social Security recipients

If you’re relying on Social Security or SSI checks or retirement savings and this is your first time taking a cash advance for Social Security or SSI loan, you may be unsure how to proceed. Here are tips to help protect yourself when taking out a cash advance. 

1. Get only what you need

When you apply for a payday loan for Social Security recipients or cash advance for SSI recipients, you may qualify for more than you need. While taking the extra cash is tempting, remember that you’ll have to repay every penny, usually with high interest and fees. As such, you should only accept an advance that’s enough to tide you over until payday. 

2. Pay back on time

If you don’t repay your payday loan, you may have to pay fines, fees, and rollover penalties. This varies by lender but is never free. The longer you wait to repay, the more charges you’ll likely incur. 

Eventually, the lender may ding your credit score, which indicates to future lenders that you’re a liability. Some lenders may even take you to court. Fortunately, you can avoid this kind of mess by repaying your loan in full and on time. Take out only what you can repay on time. 

3. Make sure your lender is legit

Many loans today originate online. While borrowers enjoy the convenience of getting a loan from their living room, it’s also easier for fake lenders to pose as legitimate operations. Watch out for scams that have poor or no reviews, require advance fees, or operate shady websites. 

You can get a cash advance from an app, but be sure you do it safely. Be especially cautious of lenders offering Social Security payday loans or payday loans for SSI recipients, as scammers target people they view as vulnerable. 

Traditional cash advance lenders 

Cash advance lenders are known to engage in predatory practices. For instance, they may charge APRs up to 400% or higher. Certain payday loans for SSI recipients also take the form of title loans, which usually involve you agreeing to give up your car if you can’t pay. 

A 400% APR sounds high, but the lender makes it look like a reasonable fee. If you take a $400 payday loan for 14 days with $90 in fees ($22.50 per $100), you’ll pay a 586% APR. If the fees were only $40, you’d still be paying a 260% APR. In contrast, even credit cards with the highest interest are only 33.24% APR.

3 Alternatives to cash advances

Safer alternatives to cash advances that come with lower interest and fees are available. Here are a few options to consider:

1. Personal loan

A personal loan can give you the money you need, with set repayment terms and lower interest rates than cash advances or payday loans. Depending on your credit score and history, you could qualify for personal loans from a few hundred dollars to many thousands. 

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

2. Credit card advance

Credit card cash advances typically come with high fees, but those are usually less than payday loans. On average, credit cards charge around 5% of the cash advance amount or $10, whichever is more. That means you’d pay about $10 on a $200 cash advance. Just be sure to pay it off quickly to avoid high credit card interest rates.

3. Borrow from family and friends

A loan from a friend or family member for a short period of time can relieve financial strain without high fees. To avoid straining the relationship, write out the terms of repayment and stick to them. While they might want to charge a modest interest rate like 5%, they may also give it to you interest-free. 

Safer solutions than a cash advance for Social Security recipients

Cash advances can help you get by when you need them the most. The problem with traditional payday loans is the cycle of debt they often create. If you can’t pay back the full loan, you’ll probably pay more in fees until the next payday. But that means even more debt — a cycle that is difficult to break. 

Retirees and SSI recipients shouldn’t have to choose between their financial future and current emergencies. Make sure to weigh the potential risks thoroughly and refrain from borrowing more than you can realistically pay back. It’s also helpful to explore other ways to access extra cash. 

Of course, you can also consider asking family and friends or exploring other safe alternatives to get the cash you need. And MoneyLion offers tools to help.

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