Cash loans are a form of short-term financing solution for consumers, a personal loan effectively that for an amount between $2,050 and $5,000 and a loan term no longer than two years (and no shorter than 16 days). Cash loans can be use for a variety of reasons. Lenders will want to understand the purpose of the loan, but what’s important to them is your ability to pay the loan down more so than the purpose. Cash is paid straight into your bank account rather than it being sent to the supplier or retail store.
That being said, there are limitations. For example, if you state that the reason is for gambling, this is a prohibited reason and will end up in decline. Cash loans need to be for a meaningful sense, such as paying off bills, dental costs, medical costs, small car, school fees, minor holidays, travel costs, moving costs, house bonds, and debt consolidation. There are many reasons. Cash loans are very flexible, which is why they’re so popular and used by many people Australia-wide.
Cash loans are effectively consumer loans that are legally issued by authorized lending institutions. Lending companies need to have the appropriate licensing in place in order to lend. The required license is called an Australian Credit License. This license will usually come with a six-digit number. An example of an ACL number might be 414 565. All lenders are required to display this license number somewhere on their website. It is essential to only deal with lenders that have a credit license and are expressing their numbers. If you cannot find one anywhere on their website, then move on to the next provider.
Benefits of Cash Loans
Here are some of the benefits of cash loans:
- Quick and easy to get. The application process for a cash loan is usually simple and straightforward. You can often get approved and have the money in your account within a few days.
- No collateral is required. You don’t need to put up any collateral to get a cash loan. This means that you don’t have to worry about losing your possessions if you default on the loan.
- Flexible use. You can use the money from a cash loan for whatever you need. This could be to pay for unexpected expenses, consolidate debt, or make a significant purchase.
- It can help build your credit score. If you make your payments on time, a cash loan can help to improve your credit score. This can make it easier to get approved for other loans in the future.
Drawbacks of Cash Loans
It’s important to note that cash loans also have some drawbacks:
- High-interest rates. The interest rates on cash loans can be high. This means that you’ll pay more in interest over the life of the loan.
- Short repayment terms. Cash loans typically have short repayment terms. This means that you’ll have to make higher monthly payments.
- Risk of default. If you default on a cash loan, your credit score could be damaged. This could make it challenging to get approve for other loans in the future.
If you’re considering a cash loan, it’s essential to weigh the benefits and drawbacks carefully. Make sure that you can afford the monthly payments and that you’re comfortable with the interest rate.
Types of Cash Loans
There are several types of cash loans available, each with its own benefits and drawbacks. Here are some of the most common types:
Personal loans are unsecure loans which can be use for any purpose. They naturally have higher interest rates than secured loans, but they don’t require any collateral.
Secured loans are loans that are backed by collateral, such as a car or a home. This means that if you default on the loan, the financier can take the collateral to recoup their losses. Secured loans naturally have lower interest rates than unsecured loans.
Payday loans are short-period loans that are typically due on your next payday. They have very high-interest rates and fees, so they should only be use as a last resort.
Title loans are like to payday loans, but they are secure by your car title. This means that if you evasion on the loan, the lender can take your car. Title loans have very high-interest rates and fees, so they should only be use as a last resort.
Pawn shop loans
Pawn shop loans are short term loans that are secure by personal assets, such as jewelry or electronics. The interest rates on pawn shop loans are typically very high, so they should only be use as a last resort.
Cash loans can be a quick and easy way to get the money you need. However, it’s important to weigh the benefits and drawbacks carefully before you apply. Make sure that you can afford the monthly payments and that you’re comfortable with the interest rate.