Most of us have at, one point or another, gone through the hair-tearing endeavor that is applying for a loan. Student loans, house loans, car loans – the list goes on. It’s a tedious and time-consuming process to say the least. Banks have a lot of safe guards in place to reduce the risk of defaulters and thus a client must be thoroughly vetted before a loan can be approved.
To further complicate matters, you must have a legitimate reason to apply for a loan. If it’s not on the bank’s pre-approved list, you can kiss your chances goodbye. And there is absolutely no way to speed things up. So what happens when you urgently need a small sum of money to make ends meet? Fortunately, the internet comes to the rescue with quick cash loans.
How does it work?
Quick cash loans, or as they were previously called, payday loans is not a new concept. It involves lenders sanctioning small sums of loan for a short period of time without any kind of collateral. Quick background checks are carried out to determine if the borrower can pay back the amount and, if satisfied, money is handed over with minimum hassle.
Since there is no collateral or guarantor in this transaction, lenders have to depend entirely on the word of the client. The risk is, hence, higher and lenders charge a proportionately higher rate to compensate for bad debts. However, since the period of repayment is small, the interest accrued is not significantly large enough to deter customers. The potential benefits outweigh any cons for most people. Here’s why.
Payday loans are fast. All you need is a computer and internet to apply for one. Some organizations boast of 15 minutes or less of approval time. If you are urgently in need of cash, this is the place to go.
Easy to get
There are no lengthy background checks. Even if you have a bad credit score, it won’t affect your ability to get a loan. Thus these loans are perfect if you find yourself in a financial emergency.
Reasons are unimportant
Unlike bank loans, payday lenders will not ask you to state your reason for applying for a loan. Once the loan is approved, you can use the money at your own discretion. Some people use them to make ends meet before the next paycheck, while others may prefer to use it to pay bills in order to avoid late charges and maintain a positive credit history.
Despite interest rates being much higher than conventional bank loans, the small amounts and limited repayment period mean that the interest accrued is not too high. Most bills have a late fee fine or an overdraft charges that gets significantly higher the more you fall behind. Since payday loans have a flat rate, sometimes paying interest on these loans is cheaper than paying late fines.
Safe to use
The best part of these quick cash loans is that they offer virtually no risk to the borrower. Since there is no collateral, there is no danger even if the borrower defaults on payment. The entire risk is borne by the lender. It is a very flexible form of finance.
Quick cash loans can be essentially summarized as a smaller, much safer version of loan sharks. Thankfully, without the threat ofbodily damage, these are perfect for unforeseen financial emergencies and scenarios where paying bills later might actually be more expensive. And the best part, anyone over 18 can get them, quick, fast, easy.