Personal Loan vs. Cash Advance: Which Is Right for You?

If you’re short on cash and just need a little something to tide you over until payday, a cash advance might do the trick. But if you’re looking at a bigger expense—or want to roll high-interest debt into one manageable payment—a personal loan could be the smarter move.

Let’s break down how cash advances and personal loans stack up so you can figure out which one fits your situation best.

Table of Contents

1. What is a cash advance?
2. What is a personal loan?
3. Cash advance vs. personal loan at a glance
4. Should I use a cash advance or a personal loan?
   1. You can’t afford small but urgent expenses
   2. You need more money than a typical cash advance supplies
   3. Your next paycheck can easily cover the amount you need right now
   4. You want more flexible repayment terms
   5. You want instant funds with no credit impact
   6. You need to consolidate debt
   7. You don’t have an SSN
   8. You want to build credit

What is a cash advance?

A cash advance is a small sum of money (usually under $100) you take out against your next paycheck. You can access it through cash advance apps like EarnIn or Dave.

Cash advances are quick and affordable, but they can deplete your income if you overuse them. They’re also less useful if you need a more substantial amount.

What is a personal loan?

A personal loan is an amount of money you borrow from a lender and repay in fixed installments over a set period. Personal loans usually provide larger amounts than cash advances. On the other hand, they involve preapproval, approval, and a hard credit check, which could lower your credit score for a short amount of time.

Cash advance vs. personal loan at a glance

Feature	Cash advance	Personal loan
Borrowing method	Cash advance apps	Lenders and banks
Typical amount	Up to $300-$400	From $1,000-$50,000
Speed	Instant to a couple of days	Several business days
Interest and fees	No interest; potential fees	6.99%-35.99%
Repayment	Lump sum when you receive paycheck	Fixed monthly installments
Credit score impact	None (when repaid on time)	Initial drop, potential long-term improvement with timely repayments
Risks	Income depletion, overspending	High interest rates, penalties for missed payments
Best for	Short-term emergency cash	Large expenses and debt consolidation

Here’s how EarnIn’s cash advance compares to SoFi’s personal loans. Both products score well in our editorial ratings.

	4.9 View Rates	4.5 View Rates
Speed	1-3 business days (free) or instant (for a fee)	Same-day funding (once loan is approved)
Speed	Speed
1-3 business days (free) or instant (for a fee)	Same-day funding (once loan is approved)
Accessibility	Easy accessibility, requires proof of income	Depends on credit score
Accessibility	Accessibility
Easy accessibility, requires proof of income	Depends on credit score
Cost	No interest or mandatory fees	Competitive fixed rates
Cost	Cost
No interest or mandatory fees	Competitive fixed rates
	Read our reviews of EarnIn cash advance and SoFi personal loans

Should I use a cash advance or a personal loan?

One of the best ways to decide if you should use a cash advance or a personal loan is the consider your situation. The right approach to borrowing will depend on things like how quickly you need the money, how quickly you can repay, the amount needed, and eligibility requirements. Here are some common scenarios.

If you…	Apply for
Need a small amount of cash (e.g., groceries/gas)	Cash advance
Need a larger amount (e.g., home/car repairs)	Personal loan
Can easily repay from your next paycheck	Cash advance
Plan to repay over a longer period	Personal loan
Want quick approval with no credit check	Cash advance
Are consolidating debt	Personal loan
Want an option that requires no SSN	Cash advance
Would like to build credit	Personal loan

Cash advances should really only be utilized for very minor shortfalls in income where access to funds are needed immediately. This should also not be a recurring situation because it puts you in a bad cycle. If you are continually in a shortfall, especially due to other high cost debt, the better option is to do a personal loan that can put you in a better financial position over time and set you on a regular schedule of payments to smooth things out.

You can’t afford small but urgent expenses

Are you short on cash for groceries or a utility bill? A cash advance can be a quick and convenient solution. You can access funds through cash advance apps like EarnIn, Tilt, or Dave, either within a couple of business days or instantly (the latter usually for a fee).

Keep in mind that various apps set cash advance limits depending on your income history, transaction history, and app usage record. Consistent income and timely repayments may grant you access to bigger advances.

You need more money than a typical cash advance supplies

If you’re facing bigger expenses, like a major car repair or replacing a broken appliance, you’ll want to look into personal loans. A personal loan can provide you with a large chunk of cash, which you will then repay in fixed installments.

Loan marketplaces are extremely useful when you’re shopping for the best personal loan. These platforms allow you to compare offers from multiple lenders at once and get preapproved quickly without risking your credit.

Your next paycheck can easily cover the amount you need right now

If you can comfortably deduct the sum you need right now from your upcoming paycheck, great. If, however, an advance today means you’ll be short on cash again next month, you might want to rethink your options. Constantly relying on cash advances to bridge the gap could create a debt spiral.

You want more flexible repayment terms

When you’re on a tight budget, fixed monthly installments could be more practical than a lump-sum repayment. Personal loans typically have one-year to five-year terms, which gives you enough flexibility to work the payments into your monthly expenses. Yes, you’ll pay more in interest over time, but you could opt for early repayment if your finances allow.

You want instant funds with no credit impact

Getting approved for a personal loan requires a hard credit check, which could be a problem for people with low to no credit. Cash advance apps, on the other hand, can provide near-instant access to funds without a credit check, based on your paycheck history and bank account standing.

Moreover, the apps don’t report the transaction to credit bureaus, so requesting an advance won’t impact your credit score.

You need to consolidate debt

Are you struggling with high-interest debt? Consolidating what you owe into a single personal loan with a lower rate could help keep you afloat. This strategy may reduce stress, lower total interest, and simplify your repayment schedule.

Debt consolidation is a major financial hurdle, so you’ll need either a personal loan or another borrowing option, like a home equity loan. A cash advance would be less useful in this scenario, since it only provides small amounts. Read about our top recommendations for debt consolidation loans here.

You don’t have an SSN

What about workers who have an income source and a bank account, but no official legal status? Traditional loans are often inaccessible to people without a Social Security Number.

Meanwhile, cash advance apps typically require only proof of income and a bank account to approve an advance. While not perfect, this solution can be a lifesaver for those who have limited funding options.

You want to build credit

While taking out a personal loan will initially lower your credit, it can also be a strategic, long-term move to improve your credit score over time.

When you borrow a manageable amount and stick to the repayment schedule, you prove that you’re a trustworthy borrower. Thus, a personal loan could make it easier for you to qualify for larger loan amounts with better rates in the future. In contrast, cash advances are credit-neutral.