Are Fast Cash Loans All Bad?
There has been a lot of negative press about fast cash loans. However, they continue to thrive in the financial marketplace. It would seem, no matter how much bad press they get there continues to be a continuing strong demand for them.
It would seem fast cash loans can be a convenient lifesaver for many who find themselves with temporary money problems. We say ‘convenient’ lifesaver as there are probably less expensive, but more difficult alternatives for getting an emergency loan amount out there.
Sometimes there is No Other Alternative
These easy-to-get unsecured loans on the other hand offer a quick way out of stressful cash flow emergencies for many who are income and credit challenged. Most lenders of these loan types aren’t too particular about who they will lend money to.
You can be unemployed, on government benefits, and even have a bad credit file report, there are quick cash loan lenders who will offer loans to all of those consumer profiles.
If this is your first time looking into Fast Cash Loans, it can be confusing knowing where to start. There are many different companies offering these loans, and the terms can vary greatly. That’s why we created this comprehensive guide to assist you.
It’s Vitally Important to Know the Pros and Cons About Fast Cash Loans
That said, it is important to know the facts about these loan types before you decide if they are right for you. In this article, we’re going to discuss what these fast personal loans are all about, including how you can end up experiencing a whole lot more misery than you were suffering before you took the loan amount out.
We’re hoping we can help you avoid those kinds of situations.
In this article, you will find information on what these fast cash loans are all about, who qualifies for them, how much they cost, and more. As you go through the report you will discover many Frequently Asked Questions that can help clear up any back of the mind queries you may have about fast cash loans.
Is there No Other Way Out?
As a last resort, Fast Cash Loans can be a great way to get quick money when you encounter unexpected bills that have to be paid. You should consider other options first though, as the high-interest rates, establishment and monthly fees can make fast cash loans horrifically more expensive than some of the other choices on offer.
If you do end up going down that road you will want to compare several lenders’ terms to suss out any major disparities between them, before deciding on one that’s right for you.
As alluded to earlier most people turn to these quick personal loans when they have some kind of temporary cash short fall. Yet, many applicants are in such a rush they often pay scant attention to what they’re getting into. They don’t take the time to find out whether or not there are other less expensive alternatives that could resolve their immediate need for cash.
So in this article, we’ll also cover what should be considered before deciding whether or not to apply for a fast cash loan, what it could end up costing you, how long it takes to get approved. And, is this the only way out of the money problems you may be experiencing?
How do Fast Cash Loans Work?
The words, “fast cash loan” usually conjure up images of predatory lending practices. However, when you’re in a pinch and need money quickly, they may end up being your only saving grace. These fast small loans are typically an unsecured personal loan amount that gives you access to funds immediately.
You don’t have to provide any collateral or go through much hassle at all – making them a potential option if you need a seriously fast loan and don’t want to go through the hassle of getting a traditional loan.
Because they’re considered high risk by lenders, this type of financing comes with higher interest rates, a substantial establishment fee, and various other fees that other types of loans don’t usually have. This leads a lot of people into believing these are not good options for their financial needs.
This is Not Always Necessarily the Case for Some!
The major appeal is, fast cash loans are easy to apply for and you can use the money for whatever you want, including repaying other debt or making a big purchase that will help your financial future in the long run (like buying a home).
The options for these loans are endless because they make getting access to funds much easier than going through traditional lenders like banks and credit unions. Who typically require a solid credit and income verification background and sometimes collateral before approving any type of loan.
That said though, there are inherent risks involved for borrowers of fast cash loans as they can come with hefty fees and interest rates. It is so very important that borrowers approach and understand how these loans work using their heads and not allowing their emotions to get in the way.
Don’t be a Sucker, Read the Fine Print
Never take out fast cash loans unless you have already read (and thoroughly understand) all of the fine print in the terms and conditions agreement that comes with the loan offer and you have already figured out how you’re going to pay it back (on time) and you know you can stick to your plan.
If you’re not sure about the implications if you commit to one of these loans, get free professional help!
Don’t go into one of these fast cash loans on a ‘wing and a prayer’ thinking something will come along to save you (big mistake).
If you have any doubt whatsoever, don’t do it!
When you’re in a bind, it’s important to weigh all of your options before making a decision. A fast same day loan might be the answer for you if you need money quickly and don’t want to go through the hassle of getting a traditional loan. But, as already mentioned, these loans are expensive and you seriously want to avoid ending up in a debt trap.
How to Avoid Getting Stung
Always create a solid plan for paying the loan amount back (on time). In other words, you have already figured out how you will have the necessary money on the dates payments are due? If you don’t make the required payments by the due dates you can be hit with serious penalty fees and additional interest charges that can quickly start adding up and backing you into a debt corner you might not be able to get out of!.
Fast cash loans are typically unsecured, which means you don’t need to provide any collateral.
They are also sometimes called “Payday Loans” because these types of small loans in the beginning were taken out to cover an unexpected expense until the next paycheck came in and covered it.
For example, if you suddenly need car repairs but don’t have the cash on hand to pay for them right away. You might be able to get approved very quickly by visiting a fast small loan lender.
However, as time has evolved there are now various other types of payment plans available in this realm of fast cash loans.
Is there Any Right Time to consider a Quick Cash Loan?
There are a few situations when it might make sense to consider one of these credit contracts. For example, if you absolutely needed a quick cash loan today to cover an unexpected expense, this type of loan could be a potential option. Or, if you’re trying to pay off high-interest debt, in rare cases it might be potentially possible to use this type of loan to consolidate other high rate loans that may save you money in the long run.
However, make sure you’re not jumping from the hot fat into the fire!
By the way, these loans are not the be-all to end-all!
Keep in mind that these loans come with an interest comparison rate that is going to be substantially higher than those for traditional loans. So, if you can wait a little longer and get a lower interest rate, or explore other possible alternatives it might be worth doing so.
However, if you need money immediately and can’t qualify for other types of loans, and you can comply with the terms and conditions of the loan contract they want you to sign, then fast cash loans might be worth considering.
How Much do Fast Cash Loans Cost and How Long does the Application Process Take?
Some of these loans allow you to borrow up to $2,000 and beyond. Scheduled intervals for loan repayments can vary from weekly, fortnightly, and in some cases, a monthly repayment amount spread over one year for paying the loan amount back.
There are a number of variations on offer in the marketplace for these types of loans and it’s usually prudent to do some advanced research to see what’s on offer.
A Handy Checklist Might Help Keep You On Track
Look at things like the minimum loan term, monthly repayment amount, repayment dates (are conveniently conducive to your pay cycle), do they offer weekly repayments, affordable repayments, can you apply online, what are their monthly fees like? Do they offer loans for bad credit?
While it might look like a quick fix, these small loans can have a lot of unexpected fees, including an establishment fee as well as an ongoing monthly fee. For example, to pay back a $2,000 loan amount over one year, your total loan repayments could be about $3,360. That’s $1,360 more than you borrowed.
The annual percentage rate on a payday loan can be exorbitant. The nominal percentage rate can vary by state, but it can be up to 4% a month. And, that figure doesn’t include any possible monthly fees or any upfront establishment fee, which most of these lenders will include in their list of charges.
These loans are typically unsecured, which means you don’t need to provide any collateral. They can be a potential option if you’re having a hard time managing bills and you need same day money and don’t want to go through the manual processes of applying for traditional personal loans.
Get a Look at the Following Numbers
For a smaller loan amount, the following numbers would likely apply.
The interest rate on a personal loan is determined by how much money you borrow – A short-term loan might cost 4% per month or part thereof, with an establishment fee of 20% of the amount borrowed. So, for example, paying back $500 over a month would cost $620 ($500 x 24%).
And, that’s just for one month!
The above are just a couple of examples to demonstrate the expense that can come with these fast cash loans.
Besides the loan amounts that are shown above, consumers can borrow even larger amounts with these types of loans, based on various lenders’ credit assessment rules. Loan amounts in the $10’s of thousands of dollars are possible.
These loans take less time from application until disbursement compared to traditional loans so there may not be much of a wait time before your funds become available…
Approval times vary depending on the lender, but you can usually expect to hear back within 24 hours. Some lenders may be able to virtually put the requested money into your bank account instantly by using an online application, while others may require additional verification.
Don’t rush if you can help it, make sure you are thoroughly familiar with the terms and conditions of any fast cash loan before applying so that you know what you’re getting yourself into.
Summarising the Pros and Cons of Taking Out a Fast Cash Loan
They’re easy to access.
You can apply online through an online application form or in-store. They have fewer requirements than other loans. For example, you may have a bad credit rating and still get a quick cash loan. They usually don’t check your credit history. It’s an unsecured loan, which means you don’t need to put up any collateral like you would with a car or a home loan.
However, this also means that the interest rates are higher on fast cash advances than on secured loans. Quick cash loans are considered predatory, meaning that they often trap people into debt cycles where they can’t honour the original loan contract terms and fail to pay back the money they’ve borrowed, on time. Once that happens, it becomes a lot easier to get trapped in a debt cycle if you can’t afford to pay.
What Kind of Payment Plan can You Get?
There are a few ways that you can repay same day loans. The most common way is through automatic debit payments, where the repayments come out of your account on the same day you’re paid (payday type loans) or weekly repayments. This means you don’t have to worry about remembering to make a payment each month – the repayment will be taken care of for you!
They’ll Want to Know Your Bank Account Details
You can also repay your loan through post-dated cheques or by setting up a direct debit agreement with the lender through your cheque account. Whichever repayment method you choose, make sure to discuss it with your lender before handing over your bank details or bank statements. That way, you know exactly what to expect and there are no surprises down the road.
Because it’s important to make sure that any payment arrangement you commit doesn’t end up being dishonored through the lack of funds in the bank account you designated. Besides additional bank fees, the lender will hit you with penalties, fees and extra interest charges if you’re delinquent on any payment terms.
Do You Know Who You’re Dealing With?
You need to take the time to research the lender options available before you commit. When it comes to fast cash loans, make sure that you’re dealing with a responsible lender and they have a history of being reputable and trustworthy – do some online research or talk with friends who may have used quick cash loans in the past for recommendations.
An Australian Government requirement for any consumer lender is they have an Australian Credit Licence. This can be checked through the ASIC website.
What is the Maximum Amount that can be Borrowed With Fast Cash Loans?
Maximum loan amounts are usually up to $2,000, but can be as high as $5,000 or $10,000. The amount that the applicant is approved for will depend on the requested amount, their income, credit history and their ability to repay. Be careful about getting in over your head. These loans can have a very painful sting in their tail if they’re not paid on time. Borrowers should only apply for a loan that they can repay within the agreed minimum loan term.
What is a Comparison Rate?
If you decide that a fast cash loan is right for you, there are a few things you should keep in mind. First, be sure to keep an eye on the comparison rate between lenders before selecting one.
How does a comparison rate work?
A comparison rate is often called the true rate as it ignores the advertised rate and incorporates all the additional fees and charges that you are paying and then works out what the true rate really is that you are being charged.
You see, personal loan type lenders capitalize (pile on) any fees and charges they bill you for, straight back onto the principal balance of the loan. The comparison rate or true rate takes that into account and recalculates what the real interest rate is that is being charged.
Comparison rates were also previously called AAPR’s or annualised annual percentage rates
This is No Place for Wall Flowers!
Next, don’t be shy, be bold and ask any potential lender for detailed information on any establishment fee, monthly fee, or any other fees you could be charged. You can even ask them what their comparison rate is, because regulations require them to tell you
Thirdly, before you dive in take a step back and make sure you have the money available to repay the loan before the loan term expires or any repayment dates become due.
10 Questions a Prudent Person Would Ask Before Taking Out a Fast Cash Loan
- How much money do I need?
- What are the interest rates and fees?
- What is the comparison rate
- Can I afford to pay it back on time?
- Are there any early repayment fees?
- Does the company have a good reputation?
- Will my credit score be affected if I take out this loan?
- Do I really need this money?
- Can I afford to pay it back with the interest and fees that come along with it?
- Is there another way I could get the money I need without having to borrow
What Happens if You Fail to Pay Back a Fast Small Loan?
If you can’t repay a payday loan, the lender may sell the debt to a collection agency. This will damage your credit score and make it difficult to borrow money in the future. This may also cause you to incur additional finance charges and fees which over time can make it impossible to repay.
You may also be sued by the lender or collection agency. If you lose, you could end up owing thousands of dollars in court costs and interest.
If you’re struggling with your cash loans, feel free to contact a debt counselor for assistance.
Are there Any Cheaper Alternatives to Getting a Same Day Loan?
- Choose An Installment Loan Or Personal Loan.
- Credit Cards And Cash Advances.
- Secured Loans.
- Pawn Shop
- Try A Credit Union.
- Borrow From Friends And Family.
- Use Your Emergency Fund.
- Ask Your Employer For An Advance Or Extra Hours.
- Government Interest-Free Loan
An installment loan is a loan that you borrow in fixed installments over a period of time. A personal loan is a type of installment loan, but it’s unsecured, which means you don’t have to put up any collateral. This makes them a good option if you need money quickly and don’t want to risk losing your possessions.
Credit Card Cash Advance
Credit cards cash advance is another option if you need money quickly. Credit cards allow you to borrow money up to your credit limit, and most offer a short grace period where you can pay the balance back without incurring interest charges.
Cash advances are loans taken out against the funds available in your checking or savings account and typically come with much higher interest rates than credit cards.
Secured Personal Loans
A secured loan is a great option if you’re unable to qualify for an unsecured personal loan, but still need cash quickly. With this type of loan, you use some sort of collateral (e.g., your car) as security against the money borrowed and usually pay lower interest rates than other types of loans.
If you have something of real value you can take it to a Pawn Shop and negotiate a short term loan against the value of the item you have. How much they will give you is an open question, but typically they won’t give you more than 50% of the market value of the item.
One way to get quick access to funds without having to go through all the traditional methods described above is by asking your employer for an advance on your paycheck or additional hours at work so that you can pick up more shifts in order to earn extra income before payday rolls around again. Asking family members or friends may also be another alternative that comes with fewer fees than using pawn shops or credit unions.
Government Interest Free Loan – No Interest Loans Scheme (NILS)
The No Interest Loans Scheme (NILS) provides low-income individuals with a safe and inexpensive source of credit. The program offers up to $1,500 for essential items.
The No Interest Loans Scheme (NILS) is a social service run by the Commonwealth Government that gives individuals or families who are in financial crisis easy access to small interest-free loans of up to $1500 for necessary household items such as clothing, furniture and white goods.
Applicants can receive multiple cash loans until their situation stabilizes without accruing any additional costs associated with borrowing money from traditional sources such as major retail store chains.
These are not New!
NILS has been available since 2006 when it was first introduced by then Prime Minister John Howard but only became more widely known after being mentioned on the popular ABC television series ‘The Checkout’.
One of the main benefits of NILS is that there are no interest rates or fees charged for borrowing money through the scheme, meaning it can actually save people money in the long run as opposed to other high-interest options such as payday loans.
You Won’t Be Declined
In addition, because NILS is government-funded, approved applicants will never have their loan declined due to credit history or financial circumstances.
To be eligible for a NILS loan you must meet three criteria: Be an Australian resident over 18 years of age; Have a household income below $45,000 per annum; and not currently be receiving any other form of government assistance such as Family Tax Benefit Part A or B
You can check the website out here
Who can I Talk to for Free About Getting Out of debt?
If you find that you’re constantly in need of fast cash loans to cover your expenses, then it may be time to consider more drastic debt relief options like consumer credit counseling or bankruptcy. Both of these solutions can provide much-needed financial relief and help get your finances back on track. However, they should only be considered as a last resort after all other avenues have been exhausted.
One great option for getting help with debt is to speak with an independent financial counsellor. An independent financial counsellor can provide you with many helpful tips, advice and plans on how to get out of the fast cash loan trap and get your finances back on track.
You can Take Advantage of Free Financial Counseling
You can contact the National Debt Helpline on 1800 00 700, which is a free hotline open from Monday to Friday from nine-thirty in the morning until four-thirty in the afternoon.
They will be able to direct you to local services that can assist you further. Remember, getting out of debt takes time and effort, but it is definitely achievable if you have the right tools and support!
The National Debt Helpline is open from 9:30 am – 4:30 pm Monday through Friday and they will be able to direct you to local services that can assist you further.
We truly hope this article has provided some helpful information on cheaper alternatives to getting a suitable loan.
Once your online fast cash loan has been approved your approved loan amount is then deposited directly into your personal cheque account. Then, you can use the cash for whatever your needs are, nevertheless always keep in mind you will need to pay it back on the agreed upon due date.
Meeting your obligation on time will keep you from racking up extra fees and penalties and bad credit listings on your credit file.
Should you get into difficulty with paying any loan back it is imperative that you contact your lender immediately and be upfront with them about your predicament. Trying to avoid them and failing to keep them informed will only annoy and frustrate them to the point they will pass your file onto a debt collector and legal action could follow.
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