It’s no great secret that most of us need a little cash injection from time to time – whether it’s for a domestic emergency, urgent car repair or other unexpected events which we simply weren’t expecting to happen.
In cases such as these increasingly more of us are looking to rely on cash loans – and they can certainly be a financial lifesaver in times of need.
What is a cash loan?
Put simply a cash loan enables you to receive funds into your bank account directly and quickly. Some lenders can even have the cash with you within the hour, thus giving you immediate access to emergency funds as and when you might need them.
Why are they better than a ‘normal’ loan?
If you need cash quickly then applying for a loan through your normal bank or building society can often take a considerable amount of time – and, of course, you might not have time on your side (especially if there’s some sort of emergency taking place!).
For this reason, cash loans can prove beneficial since there’s no need to go through a lengthy application process, no appointment with your bank manager and best of all, it can all be done online. In fact, many people apply for cash loans in their lunch break and have access to their funds that very afternoon! They really are completely straightforward and a lot simpler to apply for than most people might think.
What if I have a bad credit history?
As with any other lending application, your chosen provider will want to run a credit check to ensure you can pay your loan back on the agreed terms and without you having to struggle financially (again).
If you don’t have a sufficient credit score, then there’s a chance your application might be declined, and this could then be recorded on your credit history. That said, some lenders may run an initial credit search without it leaving any sort of footprint on your credit history so if you think your application might be refused based on poor credit then it’s certainly a good idea to ask about this facility. Most lenders tend to offer it (although not all), so it’s certainly worth asking the question.
What sort of information will I have to give during the application process?
In order to submit your application, you’ll have to provide your chosen lender with certain information such as:
- Your current name and address (covering any address details for the past three years)
- Your contact details
- Your employment details and salary information (e.g. how much you’re paid and on what date you receive your salary etc.)
- Your financial details (e.g. details of any other outstanding debts, loans or County Court Judgments).
So, what are the key benefits of cash loans?
The key benefits of cash loans are that:
- You’ll usually get a decision about your application within minutes (rather than having to apply via your bank and then wait for the outcome, which could take some time).
- Funds are released quickly and easily into your bank account, so you’ll have access to them straight away (and usually within a few hours).
- In some cases, they can help fill the gap when you need funds to maintain your existing credit score i.e. by enabling you to pay regular financial commitments, such as loan repayments, when you’d otherwise be unable to.
What are the disadvantages of cash loans?
- You can expect to pay a much higher interest rate than a standard loan and for this reason, you should only ever apply for a cash loan if it’s a genuine emergency (i.e. not for a holiday or new car).
- As with any other type of loan, if you fail to maintain the repayments then this will most definitely affect your credit score and you could end up having legal proceedings issued against you (thus incurring further costs). Also, remember that any County Court Judgment obtained against you for non-payment can vastly affect your credit score since it’ll be recorded on your credit history for a period of six years.
- Because cash loans offer a ‘quick fix’ in terms of financial relief, some applicants tend to ask for more than they actually need. Whilst this initially looks like an attractive deal it’s actually not, due to the higher interest rates involved. For cash loans, you should never be tempted more than you actually need.
In essence, then, cash loans can certainly offer a solution in times of need but should always be entered into responsibly. After all, there’s no point in ‘robbing Peter to pay Paul’.
That said, if entered into with the right frame of mind and with the financial capability to pay them back quickly then there’s certainly no reason why they shouldn’t be a very short-term option if other lending means can’t be relied on (such as an overdraft from your usual bank or building society). However, if time is of the essence (and used responsibly) cash loans can most definitely help keep you on the financial straight and narrow.