When you get into a financial pinch, a quick dose of cash may be just what you need to ride out tight times. Cash loans can be a good way to cover unexpected expenses or bills when your paycheck doesn't quite come early enough in the month.
However, companies that provide these loans tend to vary significantly in terms of the products they offer and the fees that you charge. To ensure you get the best deal on an emergency loan, shop around for the best product for your needs. We have four questions to ask when applying for these loans to ensure you make the best decision possible.
What is Your Application Like?
When you are shopping for cash loans, you probably need the cash quickly, and you don't want to go through a lot of hassle to get it. Many companies that offer these products have a streamlined application process that is quick and easy to complete. If you have credit history issues, you may also want to ask if the application process includes a credit check. There are many companies that don't include this step, giving you a better chance of getting the money you need.
What are Your Fees?
Some companies might charge an application fee or loan processing fees to cover the cost of closing your loans. Fees can significantly raise the cost of your cash, so it is important to find a company that charges as little as possible when you are shopping for cash loans. Some companies, such as Think Cash, don't charge you anything unless you actually access the money for which you are approved. This cuts down on the charges associated with the loan, making the process more affordable overall.
What is Your Interest Rate?
When you compare interest rates on cash loans, it is important to look at the annual percentage yield or APR. Because interest rates are calculated differently, the APR comparison gives you a more accurate idea of how the loans stack up.
Be prepared for higher interest rates than you might see on other types of loan products. Since these loans offer fast approval with no collateral attached, companies have to charge more for the money to offset their risk. There are still significant differences between companies, so you can get a better rate by shopping around.
How are Payments Handled?
The final question you should ask is in regards to payment structure. Some loans are set up for monthly payments that include principle and interest amounts. They may have prepayment penalties if you pay off the loan faster than your agreement. Others offer the ability to choose between paying the loan off in full at any time or making monthly payments until the balance is paid. This is the better deal for cash loans, since you can save significantly on high interest payments by paying the loan off as quickly as possible.
Cash loans are a good way to bridge the gap between your expenses and your checking account balance. By shopping around, you will be more likely to find the best loan for your needs.