Dealing with a lack of cash or a need for a loan can have you asking all sorts of questions about money and the financial world. You could wonder how money orders work or how you can get a loan with a poor credit score.
Whatever the case, when money is tight, it is worth thinking about what is worth your time and effort.
Did you know that only around 40% of Americans have enough savings to cover any emergency expenses over $1,000? 60% of people would need to scramble for money if they had a sudden visit to the emergency room, had to do car repairs, or needed to replace home appliances!
Short-term lending is one of the biggest ending industries in the U.S. and while a quick cash loan could keep you afloat for a while, it can also be a shot in the foot.
Want to know more? Let us explain!
How Do Fast Cash Loan Applications Work?
You may have seen payday loan stores before, you can apply for these online or in person, there are also plenty of online lenders. Online tends to be the best option as it will usually allow you to shop around, looking at all your options and their conditions before you choose.
With a fast cash loan, you often do not need to worry about collateral, which many loans news, however, you do still need to provide proof of your income, checking account info, your social security number, and some other personal information.
The applications can take a few minutes or hours, but most lenders will deposit the requested money into your account within a day, but some can take longer.
They Do Not Always Need You To Have Good Credit
A borrower who has a low credit score may tend to find it difficult to access lines of credit, such as some larger loans, personal loans, and credit cards. A borrower with a credit score under 580 might not be approved for credit, period.
They may have a secured credit card, however, this is unlikely to provide any emergency relief. So, how can anyone with bad credit get cash fast? Well, fast cash loans are available to anyone, so they fill the gap for those who have bad credit scores. If you are a senior citizen, you can consider senior housing finance.
These Loans Are Not Always Big
However, a fast cash loan is not going to be big, most are often below $500, and many tend to borrow anywhere from $1,000 to $100 from these loans.
The amounts for these loans tend to be quite small as they often cover specific ranges of unexpected fees, such as if you are unable to work from an illness, or if a natural disaster has occurred. It can tie you over until your next paycheck.
Fast loans are not like large installment loans, like auto loans, mortgages, or personal loans, they are there to help you make ends meet temporarily, so do not expect to get anything over $1,000! You should also not want to borrow more due to high interest as well!
Interest Rates Can Be Very High
Above we said that you would not want to borrow much due to high-interest rates, well, we weren’t kidding. Payday loans can charge a financing fee from $10 to $30 per $100 borrowed.
This is also quite extortionate as a majority of payday loans, and fast cash loans will have very short terms, usually only around 2 weeks long, meaning that the actual APR rate of a fast cash loan is very high.
It was reported that Americans often pay an average APR on payday loans of around 400%! This is an insane 20% higher than credit card APR!
You needn’t be a financial expert to know that if you do not have a good repayment plan this could leave you in a cycle of debt for quite some time, further jeopardizing your already poor financial outlook.
Therefore, it is important that before you take out any fast cash loans you are aware of the Ts and Cs and that you are certain you will be able to pay back the loan at the end of the loan cycle.
They Are Not Standardized
It is also worth being aware that the fast cash loan laws and fees will vary from state to state. So, ensure that you understand the laws in your state before you start the process of application.
There are some states, like Arizona, Arkansas, and North Carolina, that strictly prohibit fast cash loans and payday loans. However, other states may limit loan amounts and financing fees.
Some examples would include California and how a fast cash loan there can not exceed $300, while in Alabama the maximum finance fee is 17.5%.
Fast cash loans can save you when you are in a tough spot, however understanding them is essential, if you do not understand them, you could end up putting yourself in a tricky situation.
Make sure you read Ts & Cs and are aware of the fees and repayment terms before you agree to anything!
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