6 important questions to ask yourself before applying for cash loans
For those with bad credit, and having a difficult time getting funding from traditional banks, these online loans offer the much-needed relief during emergencies. You should, however, be careful because these loans are notoriously expensive.
What are cash loans?
Most lenders have simplified their application process and borrowers can borrow through their online portals and receive approval instantly. You don’t have to wait for long. You will get a fast decision once your request has been reviewed and the lender is satisfied that you meet all the requirements. The funds will then be disbursed to your bank account very quickly.
How do they work
Since these are unsecured loans, lenders do not ask for collateral. All you need to do is write a post-dated check for the amount you need, plus all the loan charges and deposit it with a lender. The lender will then credit your account with the loan and on your payday, he’ll deposit the check to his bank and the loan amount will be debited from your account.
Since most payday loans have a high-interest rate, most borrowers cannot make the single lump sum payment and still get enough funds to get by. They are then forced to borrow again or roll over their loans. Rolling over their loans attract extra charges that make borrowers sink deeper into debts.
Questions you need to ask yourself before applying for a cash loan
A cash loan may seem like an easy way out of a financial difficulty, but it is never the best solution. It is, therefore, important to ask yourself important questions before applying for loans.
Some of the questions to ask yourself include:
- Do I really need the loan?
Are you applying for a loan to have some extra money or you have a pressing issue that can’t wait for pay day? Have you exhausted all means of getting funds even from friends and family? Weigh your options and avoid using loans as an easy way out of financial trouble.
- Can the pressing need wait?
If what you want to purchase is not so urgent, you can save up for it instead of taking a loan. You should only use loans for situations that can’t wait.
- Are you able to repay the loan?
If you take a loan, you should pay back on time. If you don’t, it attracts more charges and hurt your credit score. Assess your financial situation and weigh if you are able to comfortably pay back the loan without getting into more debt. If you can’t, there’s no point taking out a loan.
- What other cheaper options can I pursue?
Instead of relying on the high interest payday loans, explore other means of funding. You will be surprised at how much you will save when using other means of funding.
- How steady is your monthly income?
Since loan repayments are usually done from your paycheck, it’s important to have a steady income that can service your loan and still have some left aside for your daily use.
- What if you suddenly lose your job?
What’s your backup plan? Your job is not guaranteed. You could lose it at any time or even get into an accident that could render you incapacitated. How will you pay off your debts? Keep that in mind before applying for a loan because it could lead to the loss of your property or plunge deeper into debts
Other cheaper alternatives to cash loans
As difficult as it may be, having and following a strict financial plan is the easiest way to financial freedom. Cut on your excess expenses and save up some funds for rainy days. Pursue other ways of making extra cash instead of relying on loans. It’s actually the best thing that can happen to you.
You could also try personal loans from traditional banks or low-interest credit cards, but you will need a good credit score.
If you still feel that cash loans are your best funding options, you can fill out our online loan application forms and get connected to a pool of trusted lenders licensed by the department of business oversight. We’ll ensure you understand our rates and terms and that there are no hidden fees for using our business services. Apply today and enjoy our expert services from the comfort of your home.