- 1 Everything you need to know about Cash Loans
- 2 Conclusion
Everything you need to know about Cash Loans
There are many types of short-term loans great for anyone who needs a little cash before their next payday. Perhaps one of the most popular are cash loans. Such loans are great for helping with a cash flow problem or unexpected expense. The following information will provide an overview into cash loans and what you should know before getting one.
What exactly is a cash loan?
Cash loans are great short-term options that involve smaller amounts of money and shorter loan durations. You will commonly hear cash loans referred to as either payday loans or cash advance loans. Many Australians prefer cash loans because they are easier to obtain, as some lenders don’t require many checks to ensure a borrower’s credit worthiness. Such loans generally range in amounts from $50 up to $2,000, but will vary by lender. The amount loaned is determined by the borrower’s monthly income and other financial obligations. The most important factor is that since smaller sums of money are being loaned, they require shorter repayment terms; for example, some lenders will extend cash loans for terms of 16 days, 21 days, or 30 days, while others will go as long as one year.
Do cash loans require credit checks?
One of the reasons many people turn to cash loans is because they do not require as many credit checks. Sure, some cash loan lenders will still require credit checks, but there are other lenders who do not. For the most part lenders care that the borrower is employed and has enough gross income to cover the loan in a short period of time.
How does the process work?
As with anything else, the process to obtain a cash loan has became become very efficient. Of course, you can choose from brick-and-mortar cash advance businesses in Australia, but you could also use one of many online lenders. To secure customers, many cash loan lenders offer hassle-free loan application processes that are highly efficient. In fact, some advertise it being as easy as 1, 2, 3. What this means is that the time between application, approval, and the funds being transferred can be as little as 2 or 3 days after applying.
What are the types of cash loans?
Much like personal loans, there are several types of cash loans. Upon seeking a cash loan the lender will more than likely mention the following types of loans:
• Same Day Cash Loans
• Cash Advance Loans
• Small Cash Loans
• Payday Loans
What are the benefits of cash loans?
There are several benefits associated with choosing cash loans. A common misconception exists that cash advances are offered by lenders who are predatory to poor people struggling to make it between paychecks. However, the truth is these loans are used by people in every income bracket – not just the bottom one. The most common reason people look for cash loans is they need emergency funds to cover an unexpected situation. Borrowing a cash advance is a better choice for an unexpected bill, as it will be cheaper than late fees or getting negative marks on your credit report. Perhaps the best advantage to cash loans is the application process, as it is quick and far less stressful than others.
What are the drawbacks of cash loans?
As with anything else, there are drawbacks of using cash loans. People’s biggest concern with cash loans is that they are very expensive. It is not uncommon for the lender to ask for fees on the loan amount of 15% or more. In addition, they can have higher-than-normal fees for late payments. If you fail to pay your cash loan on time some lenders may require you to pay additional fees to extend the repayment period or even have you seek new financing to cover cash advance fees. The reason for this is simple; the loans are unsecured, thus higher risk. As a way to cover some of the lender’s losses they impose more expensive fees to ensure at least some cash flow.
How do you choose the best lender?
So, once you decide a cash loan is right for you, how do you choose the best lender? With many cash advance lenders in the market it can become very overwhelming and stressful for borrower’s to choose a good one. Unfortunately, there are irresponsible lenders who give money to every applicant regardless if they can meet the payments or not. To avoid such lenders it’s important to understand the following:
• The Lenders: Finding lenders with a physical location is not as easy as it once was, as many cash loan lenders operate online only. Hence, determining whether or not they are legit can be harder. What you want to do is look very closely at their website for several things. First, it’s important to make sure they clearly have their terms and conditions posted. How easy was this information to find? Do the lenders have an “about us” page that details their contact information? The last thing you should find on a reputable lender’s webpage is a frequently asked questions (FAQ) page. After searching their website and reading all available information, you should contact the lender directly if you are still unsure. Also keep in mind there are many third party review sites where you can read about other people’s experiences with the company.
• The Fees: It’s true that cash loan lenders charge higher fees than others. However, don’t let them overcharge you! Here is a look at the fees and charges such lenders are permitted to collect: an establishment fee of 20% the loan’s value, a monthly fee of 4% the loan value for account keeping, government charges or fees, default charges and fees, as well as enforcement charges that can be imposed if you default on the loan.
• The Loan Terms: When looking to borrow a certain amount of money for a specific period of time, it’s best to check with different lenders to find those exact terms. As we discussed earlier, it’s common for cash loans to be as small as $50 and as much as $2,000, with terms ranging from 16 days up to one year. However, keep in mind that your repayment amount and interest charged will increase as you borrow more money for longer periods of time.
How do I know to avoid a lender?
It may be hard to determine which cash loan lenders are legitimate or not. Here are some tips to help make that determination faster:
• Avoid any lender who promises a large amount of money. Any lender guaranteeing to offer $1,000 or more to anyone is most likely preying on those with bad credit histories or financial situations that won’t allow for loan repayment.
• Do not deal with a lender trying to charge higher rates or fees.
• Do not agree with loan terms that you do not understand or are not comfortable with.
• Do not accept a loan that you cannot afford to repay.
In the end, if you play it smart a cash loan can be just what you need to cover an unexpected expense, avoid a late payment, or prevent negative marks on your credit. There are many lenders who specialize in cash loans, so make sure you conduct proper research to find the one that fits your needs. Just remember to only borrow the amount of money that you need and can afford to pay back, as cash loans can become very expensive with higher fees and interest rates.