Instant Cash Loans
Cash loans can be a very helpful thing when finances are low and an unexpected expense arises. Cash loans can be used to fill a financial gap until the next pay check rolls around. Cash loans also have their draw backs but if the borrower is responsible with the loan, it will not cause the borrower any further financial harm.
Cash loans often have high interest rates. That is due to the loans being available on short notice and often with no security and no credit check. The requirements to obtain cash loans are pretty simple. The applicant must be at least 18 years of age, be employed with a steady income and a bank account that accepts electronic transfers. If you have direct deposit, and some lenders require that, your bank account already accepts electronic transfers.
The finance charges attached to cash loans from payday lenders have come under scrutiny in the past and are often questioned in the present. The finance charge is $15 to $35 for every 100 hundred dollars borrowed. If you crunch the annual percentage rate numbers, the APR will calculate to triple digits. That number is deceiving as the shorter the payback time frame, the higher the APR. When the APR is calculated, it is calculated over the course of 365 days. If the payday loan was calculated over 365 days, the APR would be in the same ball park as a credit card APR
Not all states allow payday loans as a source of cash and the states that do, often have regulations in place to protect the consumer from being horn swaggled by a payday lender. The regulations dictate the maximum finance charge as well as the maximum loan that can be approved for a short period of time. Some payday lenders often will try to find ways around the regulations in order to make as much money as they can. No one has a problem with a payday loan lender making money on their cash loans but when the rates are exorbitant, it is looked upon as taking advantage of those with financial vulnerabilities.
Cash loans are often taken out by those with credit issues and those who need cash quicker than a bank can approve and dispense a loan. Such cash loans can be used for any purpose and stating its use is not even on the application. Because of the expense involved with paying back the loan, the applicant is advised to only borrow what is absolutely necessary. If the applicant borrows $100, the payback is between $115 and $135. If the applicant borrows the entire $1,500, the payback is between $1,725 and $2,025. If the payment is late, fees and penalties will be applied and added to the amount that must be paid back, making the loan even more expensive.
It would be helpful for all who need cash loans, if the loans were allowed in each state and regulated by the federal government the same in each state. They are a necessary option for those who need some cash once in a while and outlawing them only makes it more difficult for those that need them.