Personal cash loans are a type of personal loan designed for smaller borrowing amounts over shorter repayment periods. With Americans possessing a personal loan balance of $177.9 billion in 2022, it’s clear that many hardworking families need help in covering their financial obligations.
Since many people are new to personal cash loans, this guide will show you everything you need to know about these loan types.
1. Shorter Repayment Terms
These loans are not designed to be held for years like a mortgage or an auto loan. Most people choose personal cash loans because they aren’t locked into a long loan contract.
Instead, Kansas cash loans are most often used to support people until they get paid at the end of the month. They can also be used for unexpected expenses like emergency car repairs or a broken water heater.
Smart planning with these short-term loans will enable you to access quick financing when you need it most.
2. Repay Less in Total
Extra repayments over a longer repayment term mean more of your precious dollars going to the lender. Looking beyond APRs and many traditional personal loans means paying thousands of dollars to your lender in interest rates.
One of the advantages of cash loans is that because of the shorter repayment terms, these loans ultimately cost less than conventional personal loans.
While the monthly repayments may be higher, the shorter terms mean that you ultimately pay less over the lifespan of your loan.
3. Borrow Smaller Amounts
Most people concentrate on the maximum amount they can borrow, but not everybody wants to borrow large amounts. Sometimes you may only need a few hundred dollars to meet an emergency expense.
Traditional personal loans will never allow you to borrow such a small amount. Taking out more than you need is an example of unsustainable lending practices, which can cause serious problems for your long-term financial health.
Personal cash loans are among the only loan instruments that will enable you to borrow the amount you need and no more, making them among the most flexible loan types available.
4. Lower Credit Score Requirements
Qualifying for a mortgage or an auto loan will mean comprehensive credit checks. Your credit score is vital in determining whether you qualify and can gain access to privileged rates.
Unfortunately, many applicants with checkered financial histories may be unable to access financing.
Personal cash loans are an excellent alternative because of their lower credit score requirements. These loans are perfect for people trying to rebuild their credit histories. Some lenders may even offer no credit check personal loans.
If you’re struggling to get approved for a loan, personal cash loans can be an optimal solution to your plight.
5. Faster Approval Processes
Visit a bank for a loan, and it could take months before you receive an answer on the status of your application. Traditional lenders are notorious for making their applicants wait, leaving them in financial limbo.
One of the attractions of personal cash loans is their expedited approval processes. Some lenders can even approve your application within 24 hours, with most online lenders offering 24-72-hour approval.
The reason why lenders can act so quickly is that most of their systems are automated. You’re guaranteed to be approved if you meet their minimum requirements. Rarely does a human operator need to inspect a loan application manually.
These faster approval processes support hardworking Americans that need financing fast.
6. More Lenders to Choose From
Crowded markets are good news for borrowers because it means more competition. Americans living in smaller towns may only have a limited pool of lenders to choose from, meaning they are free to charge what they want.
An expanded online lending pool for personal cash loans means that borrowers have more choices than ever.
Comparing lenders is easy because of the presence of free online loan calculators. With these calculators, you can reach hundreds of lenders in seconds on various metrics, such as:
- Maximum borrowing amounts
- Repayment terms
- Customer ratings
Rather than manually searching for lenders on Google, you can quickly pinpoint the lender that’s right for you.
An online loan calculator is typically free of charge and won’t require entering any of your personal details.
7. Build Your Credit History
Did you know that 16% of Americans have no credit score at all? Millions more have low credit scores due to their previous lending history.
Not having a credit score or poor credit score makes it difficult to qualify for many forms of lending, including home and auto loans. Bad credit scores can even make getting approved to rent a home a challenge.
Making important milestones in life becomes nearly impossible without a positive credit history. Personal cash loans are among the financial instruments that enable people with no or low credit scores to qualify.
Successfully borrowing and paying back these loan amounts can gradually rebuild your credit history and ensure you can qualify for other types of loans.
Personal cash loans are helpful types of financing if you find yourself in need of emergency financing. Millions of Americans benefit from these loans annually with fast approval, a simple application process, and the opportunity to borrow without a high credit score.
As always, smart financial planning is essential. Make sure you can afford the repayments, and never borrow more than you need to.
Have you taken out a personal cash loan in the past?