People who tend to suffer of cash shortage just a few days before their payday know how it feels to stretch every remaining dollar. It is frustrating to be just one step away from a financial emergency and you don’t have the funds to address it. Your beater car could break down anytime or your heater at home has been showing signs of malfunction. For you, a running car and working heater are legitimate needs. The only problem is: you currently don’t have the money to pay for their repairs.
Don’t worry, all hope is not lost. In fact, there’s a subset in the lending industry that caters to short-term small cash needs like yours. They are called cash loans.
What Are Cash Loans?
Cash loans are loans you take from a lender that carries a short loan term. Most cash loans are offered between $500-$2000 depending on the lender. These loans are also payable between two to four weeks. When the due date has expired and you were unable to provide the full payment of the loan, the lender could roll the loan over. A new due date will be set but a new interest will be posted on top of your old loan.
Cash loans typically do not require collateral. You don’t have to present a home or car title; jewelry or any other asset in order to obtain them. Lenders are also not very strict when it comes to credit score. The most that you need to do is establish that you are capable of paying these loans back. Presenting employment certificates, pay stubs and other proof of income is a normal requirement when you’re trying to get cash loans.
Cash loans are also processed very quickly. Compared to traditional loans that take days, if not weeks to get approved, you merely need to wait a few minutes for approval if you apply for cash loans online.
Given the very simple and streamlined nature of cash loans, it’s easy to think that you can get them for just about any expense. However, there are reasons why you should take caution when taking cash loans.
Cash Loans Have Expensive Interest Rates
When put side by side with traditional loans, you’ll find that cash loans carry expensive interest charges. Since these loans aren’t anchored on collateral or any other form of security, lenders need to figure out a way to secure the loan. And this is where high interests come in. With higher interest rates, it is more likely that borrowers will prioritize the loan payments and prevent them from ballooning.
Second, you should also consider how easy and quick it is to take cash loans. Simply consider that you’re also paying additional fees in order to get these perks. Taking loans from mainstream lenders will take some time and if you need the funds right away, cash loans is simply the way to go.
Cash Loans Aren’t Meant for Luxuries
If you’re considering getting cash loans for a new shiny watch or to go shopping for new scarves and leather bags, you need to stop for a minute and think: do these things really matter to you? Given that you’re about to use loans for luxuries, it’s also an indication that your finances are not really in order. Otherwise, you would be paying for them with your own money.
Going back to reason number one: cash loans have high interest rates. It just makes sense to use cash loans for things that truly matter. Does it make sense to spend the loan on a new watch when your car is in dire need of repairs? Do you really need a new expensive bag when you can hardly put food on the table? With a shift of perspective, you’ll realize that cash loans are best used on basic needs and not on mere luxuries.
But the thing is, no one will be able to decide on the loan should be used except you. Even the lender will not have a say on this decision. Therefore, you will have to be discerning of your financial situation so you can maximize the benefits of getting these loans.
Cash Loans Can Make or Break Your Credit Score
While you will be able to take cash loans despite poor credit score, you should remember that how you treat these loans will impact your credit history. It is very important to post timely payments, not just to prevent incurring late penalties, but also to increase your credit score.
On the other hand, if you are negligent of your payments, the lender will not only roll over the interest of the loan but missed payments will also be reflected on your credit report. This could cause your credit score to take a dip even more.
As borrower, your goal should always be to increase your credit score. This will help open up new and better financing opportunities in the future. But while you have bad credit score and you need some cash right away, cash loans can prove to be a great solution.
The Bottom Line
Always remember that cash loans are merely tools. Ultimately, it will be you who will decide on how to best use them. If you opt to use these loans on things that only provide temporary bliss, you should be prepared to face the financial consequences later on.
It is always better to invest these loans on things that truly matter to you. These are the things that provide relief, comfort and convenience both for the short and long-term. This way, you will be able to derive the most benefits from your loans and also improve your financial circumstances.
Online Lending Frauds
In a technology-driven business environment, the ability to innovate constantly is essential in the survival and growth of every industry. Recognizing the fundamental role that innovation plays in sustaining the long-term competitiveness of the financial services industry, the increasing number of private lending providers was encouraged to take advantage of the latest internet-related technologies and move their operations into the online marketplace.
The advent of lending platforms that offer cash loans online has been arguably one of the most explosive developments in the financial market. Despite this success, however, the online lending industry continues to be a key target for fraud and other financial abuses.
How to Battle Online Lending Fraud
Rather than turning to mainstream banks for cash loans, more and more people are relying on online lenders to get the finances they need. The increasing prevalence of web-based lending activities exposes consumers to a broader range of financial risks.
Clearly, the best thing that potential borrowers can do to avoid fraud when securing cash loans from an online lending company is to check out the company’s profile and reputation in the credit market. Applicants should never give out any essential information unless they are certain that the credit company they are about to do business with is competent and reliable.
Ways to Beat Financial Stress
The stubborn impact of the subsequent crises has changed the way individuals deal with their financial situations. During recessions, people are forced to make tough financial decisions and set stricter spending priorities to keep up with their bills and meet their day-to-day expenses. This means that only a few are putting money aside for significant emergencies.
While tightening one’s financial belt is an easy way to survive in a troubled economy, it can jeopardize a person’s financial health over the long-term. Here are a few simple things that people can do to beat financial stress and stay on top of their financial lives.
Obtain Cash Loans from Online Lending Providers
The scar of the previous recession has left many individuals increasingly vulnerable to debilitating financial emergencies. Without adequate savings to manage these emergencies, they may face a list of psychological and economic setbacks that can potentially stifle their ability to build financial security in the future.
Nowadays, people can no longer rely on cash loans offered by banks and other traditional sources of credit to fund financial emergencies. Plagued by soaring bad debts, the banking market is tightening their lending standards, making it harder and more expensive for borrowers to acquire cash loans from mainstream banks to finance unpredictable expenses.
The good news is people can now secure cash loans from non-bank sources. The decline in bank lending to bad credit borrowers has given the growing number of private lending companies the opportunity to step into the lending scene and fill the void left by conventional banks.
Build More Sources of Income
One of the best things that people can do to restore their financial health and build wealth is to increase their income streams. The advent of internet technology has propelled the growth of emerging industries that provide creative and flexible opportunities for people looking for additional sources of revenue.
Top Three Tips
The current economic climate is at the mercy of factors that are beyond most people’s control. While unemployment has threatened to increase the poverty rate in most states, the rising cost of living has made matters worse when it comes to the increasing amount of consumer debt. One of the short-term solutions that most people opt for is to get cash loans online.
The idea behind cash loans is to ensure you have cash despite having unexpected expenditure. The federal government has warned consumers about cash loans, however, these agreements have been approved in 41 states. Here are some tips to follow.
What are you using cash loans for?
Cash loans online, with all of its fast approval and quick cash release, can accrue high levels of interest. In average, you can end up paying about 400% interest rate. If you are unaware about this, you could end up as one of the unsuspecting borrowers who think they got away with cash loans despite having bad credit since there is no credit check. Instead, you end up in a cycle of debt.
To avoid this from happening, make sure you ask yourself what the cash loans are for? Do you need it now? If so, are there other cheaper alternatives? Asking these questions will help you come up with the best solution.
Can you afford to repay the cash loans?
Particularly, ask yourself if you can repay the interest. Know that there is no national guideline regulating cash loans. This means the interest can fluctuate from 237% and moving up, depending on the state you live in and on the individual lender. There really is no simple way to predict the interest rate for different cash loans. It is best to be specific with details and determine whether or not you can pay for it.
Dealing with multi-lenders is a poor practice
While there are hundreds of cash loans lenders online, it is both inappropriate and illegal to have different cash loans with multi-lenders in a given pay check. Having multiple debt may leave you with a sum that exceeds your monthly salary.
In other words, while cash loans online are convenient, fast, and easy, it is your duty as consumer to understand how it can affect your finances in the future.