Cash Loan – What Are Your Options
A cash loan can often seem like a great idea especially when you are facing an emergency that needs funds you do not readily have, however, it is important to maintain a clear head and make sure you know all the facts before taking out one of these types of loans. Cash loans have their benefits but they also have some serious pitfalls to watch out for when considering them.
Cash loans come in several varieties the most popular these days is online. This is because many states are banning cash loan locations. One of the reasons behind this ban and the largest pitfall of these types of loans is the fees that are attached to the loans. In some cases, they can be as high as 1800 percent when you factor the fees using APR calculations.
The biggest pitfall with cash loans is that you do not realize just how high the fees can be. In many cases, the fee is only 15 or 20 dollars per 100. The loan is usually repayable within a two-week period and if you pay it off at that two-week period, the fee does not seem like much. However, if you need an extension you have to pay an additional fee, which is the same or more than the original fee. After a few extensions, you can easily end up paying more than the original loan amount.
This is the pitfall that many people who take out cash loans of any type fall into, especially because a cash loan is so easy to obtain. Online applications can be filled out in minutes and in some cases, all you need to do is prove you have work and you can be approved. A Cash loan does not require credit checks. If you are applying at a physical location, the same criteria apply though you may receive your money instantly after approval.
The ease of getting these types of loans is one of the biggest reasons why people turn to them despite the high fees. It seems like an easy way to have money on hand whenever you need it, even between paychecks. However, the high rate of the fees and the ease of obtaining it is part of what causes individuals to get in trouble when they take out these types of loans. Many people constantly borrow and before they know it becomes trapped in a never-ending growing cycle of debt.
In order to avoid these pitfalls, use a cash loan only when you have no other option and you know you will be able to repay it within the terms of the loans usually two weeks but it can be as many as six to eight weeks. If you follow these two simple tips, you can easily avoid any of the pitfalls associated with a cash loan of any type whether it is a payday loan, title loan, pawn cash loan, or the cash loans that are available online.