Regardless of what you may think of cash loans, debt is not the root of all evil. Financially responsible people not only use loans of everyday expenses but also for mortgages and car shopping. On the other hand, secured and unsecured loans are quite popular among borrowers, and many of them offer online applications.
Even though cash loans might be a suitable temporary solution for your financial troubles, you should be careful regarding their use. When you consider all the options, you must be wondering why cash loans are better than common alternatives. Here are a couple of benefits that can help you make the right decision.
Higher borrowing limits
When compared to credit cards, cash loan offers you a higher borrowing limit. Although some online lenders offer small amounts, others can provide you with large sums of money. Usually, credit card limits are significantly lower than cash loans.
Additionally, they have a considerably larger fee, as well as interest. However, the borrowing limit might not be the same for everyone. It all depends on your credit score, income, employment history, current debt, and frequency of credit inquiries.
Lower interest rate
As we mentioned before, in comparison with credit cards, cash loans offer significantly lower interest rates. For example, unsecured loan rates begin at 5% of 6%. On the other hand, a lot of credit cards have low or no-interest over 21 months, but rates spike at 10% of 20%.
On the other hand, when it comes to cash loans, they are often unsecured and don’t require from a borrower to place a collateral. However, pay attention to consequences and restrictions if you don’t repay the loan on time, but the loss of family home of a vehicle isn’t among them.
Predictable payment schedule
Usually, cash loans come with fixed interest rates, monthly payments, and repayment terms. Once you are approved, you will know precisely how much you’ll need to repay and how many monthly installments you will have to make.
On top of that, the interest rate will be clearly displayed. When it comes to revolving credits, they aren’t predictable as cash loans. And you can end up in a significant amount of debt if you aren’t careful enough.
Why should you take a cash loan?
People often face financial emergencies, and cash loans come as the most convenient solution. They have a high approval rate, the money is on your account within 24 hours, and you can apply online, without going to a bank.
However, with this type of convenience, comes also a great responsibility. Even though cash loans are widely available, they do have certain limitations when compared to a traditional loan. For example, you can’t borrow a large amount of money, interest is often high, and your repayment period is usually short, up to 24 months.
For that reason, only apply for a cash loan when you are short for cash, and you need some emergency funds. Also, never take more than you actually need.