Are you short on cash? You are not alone; so many people are finding themselves strapped for money these days, as uncontrollable factors (like pandemics and natural disasters) have changed the way we work and live. Jobs will come, and jobs will go, wages will rise and fall, but the one thing that is certain is having bills. For many of us, our paychecks stay the same size while the cost of living rises. That means that we can come up short on cash for the things we need. Read on to learn more about instant cash loans, how they work, and what to watch out for.
For the times where you can’t meet your due dates, it’s likely that you’re going to need access to instant cash. An instant cash loan can be a blessing for those that are trying to make ends meet. But like a traditional loan, an instant cash loan is a financial obligation that shouldn’t be taken lightly. To make the right financial decisions at the right time, it’s essential to understand what options are available to you.
In this post, we’ll give you some information about instant cash loans, some types of instant installment loans available to you right now, and how you can pick the one that works best for your financial goals.
What You Need To Know About an Instant Cash Loan
These lending options can come in the form of a payday loan or a cash advance. Also, they tend to have more restrictions and less regulation than traditional loans.
Here are some essential facts to consider when looking at an instant loan to get cash:
There Is Still an Application Process
Even though the process is less complicated and faster than applying for a bank loan, instant loans still require a loan application. You’ll still need to provide your basic information and verify your employment and income.
An Instant Loan Doesn’t Always Mean “Instant”
It could take a day or two to get a decision back on an instant loan. While this is still much faster than a traditional loan disbursement, applicants should prepare for a slight wait.
The Loans Are Usually Small
The average loan amount for an instant loan hovers between $300 and $500, with most people using these cash advances for unexpected emergencies or cash shortfalls.
Instant Loans Are Short-Term
“Short term” sounds like an excellent adjective for a piece of debt, but in fact, this loan can be one of the more challenging to repay. Short-term loans require the borrower to quickly pay back the loan, which can be challenging for someone already looking for debt assistance.
Interest Rates Are Very High
Instant cash advance loans and payday advances can be subject to very high interest rates and unfavorable terms which is why it is important to do your due diligence when looking at these types of loans. Lenders charge high rates as an added layer of security for lending to borrowers with low credit scores.
Bad Credit Is Not a Problem
Although you can get an instant loan with a not-so-great credit score, they can be easy financial traps to fall into that can worsen your credit if you can’t repay the loan by the end of the term.
Payday Loans
A payday loan is a short-term loan that is available to help you with a short-term cash need.
Payday loans are among the most popular forms of instant cash loans. Not only are they quick, but they are also very accessible to people with low or bad credit scores—a factor that makes applying for a regular loan a nonstarter for many people. But there are many dangers of payday loans, so make sure to do your homework before signing for one.
To get a payday loan, a borrower writes a check to a lender for the amount of money they want to borrow, plus the lender’s interest rate and applicable processing fees. The lender then gives the borrower the loan amount and holds the check for 14 days, when the borrower’s next payday hits. On or after that payday, the lender cashes the check, recoups the loan amount, and profits from the interest and fees. Thanks to the internet, this “check writing” and “check-cashing” are through digital transfers like direct deposit and automatic withdrawals.
Payday Loan Dangers
Essentially, payday loans work best when the borrower can pay back the lender in full within the terms of the loan agreement. This is usually within two weeks, and the payment will include high interest and additional fees. These conditions are what make payday loans among the most expensive loans that a person can borrow.
However, when a loan isn’t repaid by the end of the loan agreement, lenders roll over those accounts into new contracts. It may be easy to think of this rollover as a simple extension of the life of the loan, with some added fees and possible penalties added on. But in fact, you are entering into a new loan agreement with its interest rate and fees that have nothing to do with the fines for not paying your original loan back on time. These compounding fees are a reality for many people who get into payday loan trouble; combined, they owe lenders billions of dollars on loans that average less than $600 per person.
Payday loans can be helpful, but they can be financially dangerous if you can’t pay them back. The fine print on payday loan agreements can seem complicated, but you must review it so you know what kind of commitment you’re getting into.
Peer-to-Peer (P2P) Loan
A payday advance loan is not the only option for borrowing money without the help of a bank or credit union. In a relatively new lending structure, peer-to-peer (P2P) lending connects investors looking to fund loans for people who need money.
Peer-to-peer (P2P) lending avoids using traditional financial institutions. These loans are made possible by groups of investors connected directly to borrowers who may not find success securing a loan through conventional means. A typical application process would include supplying your financial information, credit history, and possibly some insight into why you need the loan. If you meet the lending company’s criteria, you will be approved, and investors will fund the loan.
Because investors instead of banks determine them, P2P loans are very flexible, with a range of loan terms that include reasonable repayment rates for borrowers. And while your credit score will ultimately help determine that rate, P2P loan approvals don’t rely as heavily on credit scores as other types of loans do
While P2P loans can be issued for small businesses, they are still primarily used for personal loans and are sometimes offered for specific uses, like home improvement projects and medical expenses. Loans are approved by investors that see them as a reasonable risk; since their profit will be the interest you pay, they need to believe that you will make payments.
Overall, P2P loans can provide people without the best credit with an opportunity to get reasonable rates without the tight conditions that come with payday loans—which is why P2P lending is growing in popularity.
Don’t Want A Loan? Then You Need To Hustle
After looking at the options available for getting cash through instant loans, you may decide that they are a little riskier than you’re ready for. However, if you genuinely need cash fast, then you’re going to have to do it “the old-fashioned way,” as someone’s grandfather probably says.
That means you’re going to have to earn that money. Here are a couple of ideas that may work for you:
Sell Your Stuff
Make this the year that you finally have that yard sale. If you don’t have a yard (and don’t dig the idea of home-based retail), take your old threads to a local consignment store, have them do the selling, and then share the profits. Pawnshops and online auction houses are also great places to turn your old stuff into the instant cash you’re looking for.
Get a Side Gig
Places like restaurants, warehouses, and grocery stores have available hours around the clock to work against a full-time job. And if you have a car, delivery and rideshare options like DoorDash, Lyft, and Uber allow you to set your hours and work when you want to.
Try Crowdfunding
Sites like Plumfund and GoFundMe give people a chance to send money to cover rent, bills, emergency car or home repairs, and unexpected medical expenses.
If you don’t want to get a loan, know that earning the money you need may take longer than borrowing it from a lender. But if you can make cash fast while you avoid debt, we highly recommend you do it!
Getting Instant Cash
When you need instant cash, the time and mental focus you need to make sound financial decisions can get cloudy. The pressure to fix your problem can be so significant, you may look over some of the responsibilities—and consequences—that come with taking on an instant cash loan.
This is why it is important to remember that an instant cash loan delivers quickly and conveniently as it provides you with financial relief. And without proper management, that debt can get out of control quickly.
In a world where when you need money right now and can get cash advances with lightning speed, you must remember to slow down the process of looking for a loan to make sure that you are educated on every aspect of any cash loan you acquire. Know the terms of any loan application you fill out. Borrow only enough instant cash to meet your financial needs. And always, ALWAYS pay back the money on time.
No matter what your financial situation is now, remember that your long-term financial health can be responsible for a large part of your happiness. That means that even in our most desperate times, we have to plan for the times we won’t be struggling and remember what we do now determines so much. No financial decision is to be taken lightly.
Do what you can to learn the specifics of your instant cash loan so that your short-term cash problem doesn’t turn into a long-term financial burden.