Cash Advance Loan $1000: $1154 Repayment Calculation

A cash advance is a type of short-term loan offered by banks or alternative lenders. Many credit card issuers also offer a similar service that allows cardholders to withdraw cash. Despite the high interest rates and fees associated with these loans, borrowers are drawn to them because of their fast approval and funding.

For individuals facing a financial emergency with limited options for obtaining funds, a cash advance may be a viable solution. However, it’s important to have a realistic plan for repaying the borrowed amount within a short timeframe. It’s important to keep in mind that cash advance loans are designed to provide quick access to funds, but they come with high interest rates and fees and should only be used as a short-term solution.

How to Calculate Cash Advance Loan of $1,000

To calculate the total borrowing cost of a $1000 cash advance loan with a 400% APR (annual percentage rate), we’ll assume a common repayment period of 14 days (2 weeks).

  • Loan Amount: $1000
  • APR (Annual Percentage Rate): 400%
  • Repayment Period: 14 days (2 weeks)

Now, let’s calculate the total borrowing cost for the $1000 cash advance loan:

Interest Charges (Cash Advance Loan – $1000) = Total Loan Amount * Daily Interest Rate * Repayment Period

Daily Interest Rate = APR/365

Daily Interest Rate = 400/365 = 1.0959%

So interest charge on a cash advance loan of $1000 = $1000 * 1.0959% * 14 = $153.88 (approx.)

Total Repayment Amount (Cash Advance Loan of $1000) = Loan Amount + Interest Charges

Total Repayment Amount = $1000 + $153.88 = $1153.88 (approx.)

Total borrowing cost of $1000 cash advance loan with a 400% APR for a 14-day repayment period would be approximately $1153.88

Cash advance loans carrying a 400% APR can result in substantial expenses owing to their exorbitant interest rates and brief repayment schedules. It is crucial for borrowers to diligently assess their financial circumstances and explore alternative borrowing choices that offer lower expenses and more advantageous conditions, whenever feasible. If you are contemplating a cash advance loan, it is essential to gain a comprehensive understanding of the lender’s terms and conditions before making any further decisions.


Nikesh-Mehta-AllOnMoney

Hi, I am Nikesh Mehta, owner and writer of this site. I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected].


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