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Lenders take varying degrees of risk when extending cash advances to borrowers, since there is always the possibility that he or she will default on the cash advance, i.e. miss the payments or simply run away from the responsibility of paying it back. Even when a cash advance is stable against a purchase, such as a home mortgage, and they are allowed to take the house in lieu of payment, they still have to find a new buyer to recoup their loss. In worst cases, when the cash advance is unstable, lenders risk losing the entire amount of the cash advance, or have to go through the tedious and sometimes expensive process of going through a long collections process, which may or may not recover all of their money. A short term loan can be secured on your home to make the rate much lower as the short term loan is a much lower risk to the lender.

For these reasons, all but the most unscrupulous lenders are looking to minimize their risk when evaluating a potential borrower. A lender is looking for a borrower who gives every indication that he can repay the cash advance. So, as a borrower, you want to appear trustworthy and financially prepared to repay your cash advance in a timely manner.

One of the main ways you can establish a lender’s confidence is to present them with a strong credit history. Your credit history doesn’t need to show large credit limits or buying power, just consistent payment. Even if you only have a history of paying off small amounts and keeping small balances, this shows financial discipline and trustworthiness. You have proven yourself to be faithful to your commitment to pay back what you borrow.

In the eyes of a lender, good credit has more to do with habits and practices than credit limits and account sizes. If you have a history of paying off your credit card on time and a steady income, you can expect to receive a cash advance up to the limit your income supports.

The second major factor in a lender’s decision to grant you a cash advance is your income. Most lenders work on a percentage rubric of monthly income versus monthly payment size in determining whether a cash advance is right for you.

For instance, if your monthly income is £2,000, and the potential mortgage payment on a new home would be £1,000 per month, you are unlikely to have the income to support that mortgage. On the other hand, if you can show a potential for growth in your income, such as a pending promotion or obtaining an advanced degree, you may be able to convince a lender to bank on your bright future.

Note, however this is weighed against other financial responsibilities you may have, such as existing cash advances or balances on your credit card, your age, and the kind of profession you are in. If you are lucky, in the end, to get the approved cash advance, creditors may tuck in the “added risk” into your cash advance arrangement by charging higher interest. Thus, if you have a poor credit history, it may be of benefit to fix existing debts and establish a better rating before applying for a larger cash advance like a mortgage.