Quick cash loans may have been around for centuries, but the internet has increased the accessibility and popularity by leaps and bounds. Before applying for one of these loans, it is best to understand the rewards as well as the risks. Knowledge is power, and understanding the terms and conditions is essential to avoid the pitfalls. This will help you maximize the benefits of taking out an online cash loan.
- The application process is simple with little need to submit supporting documentation or detailed information.
- The turnover time for approval is very fast, commonly within 24 hours of submission.
- Once the loan has been approved, the funds will be paid directly into your bank account. Some loan providers may offer alternative means for you to conveniently access the funds.
- Monthly repayments will be deducted from your bank account, or you can select a direct payment option.
- Quick Cash Loans are normally short term. You can repay the full amount within just a few months of receiving the funds.
- You will not be required to provide a reason for what the funds will be used for.
- You will not be required to provide surety, collateral or a security deposit.
If it seems too good to be true, it usually is. Unfortunately, all these benefits do not come without some risks. However, understanding each of the disadvantages can help you turn it into a benefit rather than a pitfall.
- Quick Cash Loans notoriously have higher interest rates than those provided through regular lending channels. This means that you will be paying more to service the loan in the long run. Simply shortening the term of the loan can mean that you pay less interest at the end of the day. Comparing rates from different providers can also save you some of the expense.
- There may be hidden costs associated with the loan that you should be aware of. Read the fine print carefully and look for admin or service fees. Check any other charges that may form part of your monthly repayment, or need to be paid upfront to enable you to access the funds.
- The loan amounts are usually small. However, this can be a benefit as it is easier and faster to repay a small amount and there will be less interest. Always make sure that you will be able to afford the repayments.
- The term or repayment period is relatively short. You can choose to repay the entire amount in one lump sum shortly after you have received the funds, or you can select a repayment period normally between 3 to 6 months. Some loan providers may make provision for longer periods of up to a year or even two years.
- You need to be aware of the debt trap. If you are late with a payment or miss a payment, additional interest and charges will apply. This may result in the monthly repayment no longer being affordable. The further behind you get, the more you will be required to pay. This may result in additional penalties such as a bad credit rating, black listing, or even the seizure of your belongings to recover the amount owed.
If you don’t require funds urgently, it is recommended to instead apply for a loan through regular banking channels. No matter how urgent the circumstances, always take the time to compare interest rates and do your due diligence before submitting an application.
Most importantly, always ensure that you will be able to afford the repayments after taking into consideration your income and expenditure. Taking all these factors into consideration will ensure that you get all the rewards and avoid the risks of Quick Cash Loans.