Cash loans have become a convenient way to obtain cash expeditiously when your budget is overstretched. These loans are generally used for emergency situations, when bills come due before your paycheck comes. In many cases, loans are cheaper than paying late fees on bills or overdraft charges for bounced checks. However, before you apply for a loan to ease your cash crunch, there are four things you should know.
Not all Loans are Alike
There are numerous companies offering cash loans today, and the deals can be quite different from company to company. Some companies do not charge any fees with their application process, while others might nickel and dime you exorbitantly. Others might assess exorbitant interest rates that end up putting you even deeper into the financial hole.
It is important to shop around to find the company that offers the best rate and the easiest terms to understand. This way, you will get the money you need at a price you can afford.
Not all Loans are Right for You
Companies have different criteria for approving applicants for their cash loans. For example, many want you to have a steady job to qualify for a loan, while others simply ask that you have a steady source of income. These companies will often accept alimony or social security benefits as regular income so you can qualify for a loan.
When you are shopping around for a loan, make sure you understand all of the terms of the loan to ensure you get the best lending package for your needs.
Emergency Loans are Expensive
As a general rule, cash loans tend to cost more than traditional loans offered by banks and credit unions. This is because companies that offer emergency loans are set up to get funds to individuals quickly. They also approve more applicants for loans than banks will. The additional risk they assume for their looser lending practices means they must charge higher interest rates on their loans.
To prevent your loan from getting too expensive, have a payment plan in mind before you ever apply, so you can pay off the balance as quickly as possible.
Emergency Loans may be the Best Option
While some individuals are hesitant to apply for one of these more expensive cash loans, the truth is that these lending options may be the best available option in some situations. If you need cash very quickly, these companies are able to handle their loan transactions faster than banks - sometimes getting you the money in as little as 24-48 hours. They are also more willing to loan to individuals with less than stellar credit. Because you can apply for these loans online, the application and approval process can be completed any time of the day or night.
Cash loans are not right for everyone, but they can be the best option in certain situations. To protect yourself from undue expense, it is important to educate yourself about the common rates and terms of these loans. When you are armed with information, you will be better equipped to find the best emergency loan for your needs.