APR 5.99% – 35.99%·$100 – $50,000

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Head to head

Personal loan vs credit card cash advance.

Pulling cash from a credit card is one of the most expensive ways to borrow. The transaction fee is 3% to 5% of the amount, the cash-advance APR is typically 4 to 6 points higher than the card's purchase APR, and interest accrues from the moment of withdrawal with no grace period. Personal loans price-out one-tenth the cost in most situations.

Side by side

Personal loan vs Cash advance

AttributePersonal loanCash advance
StructureFixed installment loanRevolving balance on the card
APR5.99% to 35.99%Typically 25% to 30% (cash-advance APR, separate from purchase APR)
Grace period30 to 45 days before first paymentNone. Interest accrues from day of withdrawal
Transaction fee0% to 8% origination at loan funding3% to 5% of amount, or $10 minimum, per withdrawal
Amount$100 to $50,000Up to your cash-advance limit (usually a fraction of the credit limit)
Time to fundNext business dayInstant at ATM or bank teller
Reports asNew installment trade lineHigher utilisation on existing card; may flag the account
Best forAlmost every situation over $500Sub-$300 emergency with no other access in the next 24 hours
Verdicts by scenario

Which wins, when.

  1. 01

    Any amount $500 or larger over any timeline

    Winner: Personal loan

    Personal-loan total cost is materially lower because of the grace period and the lower APR; the transaction-fee math alone makes cash advances expensive.

  2. 02

    Need $200 in cash tonight, no other access

    Winner: Cash advance

    Cash advance is instant. Repay within 14 days to minimise interest exposure, then pursue a personal loan if the cash need recurs.

  3. 03

    Using a cash advance to pay another credit-card minimum

    Winner: Personal loan

    This pattern signals distress. A debt-consolidation personal loan addresses the root cause; rolling cash advances delays the reckoning at higher cost.

  4. 04

    Want to keep credit-card utilisation low for an upcoming mortgage application

    Winner: Personal loan

    A personal loan does not raise credit-card utilisation. Cash advances do, and the spike at the wrong moment hurts mortgage pricing.

Common questions

Frequently asked.

Why does a cash advance APR differ from a purchase APR?+

Card issuers price cash advances as higher-risk borrowing because the cash is not tied to a recoverable purchase, the borrower has shown a preference for liquidity, and historic default rates on cash advances exceed default rates on purchase balances. The premium runs 4 to 6 percentage points above the purchase APR for most cards.

Does a cash advance hurt my credit score?+

Indirectly. The transaction itself is not reported separately, but the increased balance raises the card's utilisation ratio, which is the second-largest factor in FICO scoring. A $1,500 cash advance on a $5,000-limit card pushes utilisation past 30%, typically dropping the score 15 to 40 points until repaid.

Are there cheaper alternatives to a cash advance?+

Yes, in this priority order: small personal loan from a credit union or marketplace, federal credit-union Payday Alternative Loan (capped at 28% APR), borrowing from family with a written note, hardship withdrawal from a 401(k) if the situation qualifies, and payday lender as the last resort (still cheaper than the typical cash-advance/rollover cycle when factoring in cash-advance fees and lost grace period).

Is there a daily cash-advance limit?+

Yes. Most cards cap cash advances at 20% to 50% of the total credit limit, with a per-day ATM limit of $300 to $1,000. The lower per-day limit is set by the issuing bank for fraud control; the credit limit cap is contractual.

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