You’re unemployed and need to access your benefits before they’re disbursed. Is it possible to get a cash advance if you’re in dire need of money? In short, yes.
Keep reading to learn more about how unemployment benefits are disbursed, cash advance options to get paid earlier and what to expect in terms of fees.
Bank, Borrow, Invest, Grow
Common Ways to Receive Unemployment Benefits
Most states distribute unemployment benefits by direct deposit, prepaid debit card or paper check. Contact your state’s unemployment office to confirm which methods are available to you.
Direct Deposits to Your Bank Account
If you opt to receive direct deposits to your bank account, your state’s unemployment office will send the funds to your checking or savings account. You may also have the option to receive the benefits on a prepaid card you already own. Either way, the funds will be available for use right away.
State-issued Prepaid Debit Card
Some states allow you to collect unemployment benefits through a state-issued prepaid debit card. Selecting this payment option means you’ll get a card in the mail. Once it’s activated, you can use it as you’d use any other debit card to access your benefits. However, be mindful that some state-issued prepaid debit cards are subject to fees, so you want to read the fine print to ensure they’re the best fit for you.
Bank, Borrow, Invest, Grow
Paper checks are another common way to receive unemployment compensation. Your state’s unemployment office will send a check in the mail, and you’re responsible for cashing it at your bank. Unfortunately, the funds may not be available for use right away, depending on your financial institution. And if you’re unbanked, you’ll likely have to pay a fee to use a check-cashing service.
Can You Get Cash Advances for Unemployment Benefits?
Many unemployed borrowers qualify for cash advances. However, it should only be used as a temporary solution to avoid getting trapped in a vicious cycle of debt that quickly becomes overwhelming.
Costs and Fees of Traditional Cash Advances and Payday Loans
Traditional cash advances and payday loans come with hefty fees and high-interest rates. You’ll generally pay a cash advance fee and interest to access the funds – many states permit lenders to charge interest rates between 199 and 600 percent. And if you’re unable to pay back the cash advance or payday loan on the due date, you risk incurring even more fees which can mean bad news for your finances.
What are Cash Advance Apps?
Cash advance apps are innovative, low-cost online solutions that let you access your earnings before payday. The funds are typically deposited into your checking account early, but for a small fee. However, you generally won’t pay interest or additional charges on these temporary loans, making them a viable alternative to payday loans.