Cash Advance Law and Legal Definition
Cash advance is a loan taken out against a line of credit or credit card and usually higher-than-normal interest charges will be imposed for this loan. The interest rates will be more than the prime rates. Also, there is seldom a grace period in this type of loan during which no interest is charged. These factors make cash advances more expensive than many other types of financing practices.
Following is an example of Alabama state statute [Code of Ala. § 5-18-3] that defines the term Cash Advance.
Cash Advance means “The amount of cash or its equivalent that the borrower actually receives or is paid at his direction or on his behalf”.
