Payday loans have been around for decades in a form or another. This type of financing is ideal for those who need cash fast. Traditional loans, by comparison, have strict requirements and take months to be approved.
Whether you’re dealing with a personal emergency, unpaid bills, or medical issues, cash loans can make a world of difference. Just make sure you’re aware of the risks involved. Common mistakes, such as borrowing more than you need or failing to pay back on time, can cost you big.
More than 11 percent of borrowers who earn $15,000 to $25,000 and eight percent of those earning $30,000 to $40,000 per year have used this financing option. Surprisingly, there are customers who make $100,000 or more and still take out payday loans.
The truth is that emergencies occur when you least expect it. No matter your income, you might not able to cover your expenses right away. Cash loans provide the money you need when you need it the most.
Not sure how to proceed? Here are five ways to determine whether or not cash advance loans are right for you:
You’re behind on Mortgage Payments
U.S. mortgage debt reached $8.8 trillion at the end of last year. If you’ve purchased a new house, you have to pay a lot more than the actual mortgage. This includes utilities, interest, property tax, repairs, and so on.
Falling behind on mortgage payments can lead to foreclosure. Unless you find a solution, you risk losing your home.
Under these circumstances, taking out a cash loan makes perfect sense. A traditional bank may decline your application considering that you’re already paying a mortgage. Private lenders, on the other hand, are more flexible in this regard.
You Have a Medical Emergency
Is your child feeling sick? Have you suffered an injury that needs immediate medical care? Unless you have enough savings, you may not afford these costs.
If that’s your case, consider taking a payday loan. It could literally save your life.
Your Credit Score Is Less than Stellar
No matter what you need money for, you must have stellar credit to get a traditional loan. What if you’re dealing with an emergency?
Even with poor credit or no credit history at all, you can still request a cash loan. As long as you have a steady income, most lenders are likely to approve your application.
You Can Repay on Time
The reason why so many borrowers get in debt is that they fail to pay back the loan on time. This results in higher interest rates and penalty fees.
Before requesting a cash loan, make sure you can keep up with the payments. Assess your budget and determine how much you can borrow. Missing a single payment can harm your financial health.
You’re Aware of the Costs Involved
Quick cash loans are convenient and easy to obtain. These benefits, though, come at a price.
When you apply for a loan, read the fine print and beware of the costs involved. Make sure you know exactly how much money you’ll have to pay back and what happens in case you miss a payment.
Learn More about Cash Loans
Depending on your circumstances, cash loans can be a great choice or a bad decision. Don’t borrow money just because you can. This type of financing isn’t meant to cover travel costs, expensive shopping sessions, or weekend getaways.
Interested to find out more about quick cash loans? Visit our Learning Center to better understand your options and make smarter financial decisions.