Over time fast loans or payday loans have emerged as a modern form of borrowing. Fast loans are a financial solution for short-term borrowing needs. This source of finance can be a lifesaver during tough financial situations. Whether you are struggling to pay your monthly rent or need to immediately get your car repaired, fast loans can come in handy.
Like most things in life, fast cash loans come with a set of pros and cons. In this post, we are summarising both aspects.
Pros
- It’s quick
An emergency waits for no one. If you are in a financial crunch, it would be feasible to take out a payday loan. Usually, online lenders approve applications and provide funds within the same day. If you desperately need cash, some lenders even approve fast cash loan within an hour. When it comes it an immediacy, fast cash loans are unmatched.
- Easy approval
Traditional lenders and banks are quite strict when it comes to who they lend funds to. The process is long and difficult. On the other hand, online lenders have a simple approval process. As long as you are 18 years of age, a citizen of the country and employed, you’re most likely to get approved for a fast cash loan.
- Accessible
For a conventional loan, you’d have to wait for the bank to open and go there to apply. But not for fast cash loans. As long as you have an internet connection, you’re good to go. Whether you’re at home or work, you can apply for a fast loan wherever and whenever. It caters to the modern consumer.
- No paperwork
Unlike other forms of borrowings, there’s no cumbersome paperwork involved with payday loans. The application is easy and simple.
- No collateral
Collateral is an asset you pledge to the lender in case you fail to repay the loan on time. For fast cash loans, there’s no collateral requirement. So, if you fail to repay on time, you won’t jeopardize your car, house or any other asset.
- Purpose
A lot of times lenders refuse to lend money for certain purposes. Online lenders aren’t concerned about your intended purpose. From paying your electricity bill to purchasing a new washer, you can use the borrowed funds however you please.
- Credit score
Most lenders look at your credit score when lending finances. A bad or poor credit score could be the basis for rejection. However, fast loan lenders don’t look at your credit score. As long as you currently have a steady source of income, you’re eligible.
Cons
- High-interest rate
Payday loans are one of the most expensive forms of borrowings. If you are unable to repay on time, there’s a late fee added that further increases your loan amount.
- Short repayment
Along with extremely high-interest rate, fast loans come with a short repayment period. You have to repay on time or face the consequences in terms of an extortionate loan amount. Also, online lenders are not afraid to play dirty. If you refuse to repay on time, they pass on the loan to an external collection service.
- Credit score
While a good credit score isn’t necessary for taking a fast cash loan, failure to repay on time adversely affects your credit score. This will further impact your ability to borrow in the future.
Taking out a fast cash loan can be tricky. We’d advise to do your due diligence and use a provider with a good reputation like Moneyspot. As the process is completely online, make sure you’re borrowing from a trusted lender.
