The Disadvantages of a Cash Loan

Cash loans are an enticing option when money is tight. These short term loans are also known as payday loans. Cash loans help those with less than perfect credit, who encounter an unexpected bill, gain financing. While having access to extra money for those expenses can seem beneficial, there are many disadvantages to utilizing loans.

Cash loans are available for amounts up to $1500 and often can be deposited in your bank account within one hour. Cash loan repayments are based on when you receive your next paycheck. Typically, loans terms are no more than two weeks. During the loan application process, the candidate is asked a variety of information such as place of employment and personal references. In event that you do not repay your loan the company will refer your account to a debt collection company. The debt collection company takes the liberty of calling you at your place of employment as well as your personal references. This can become a problem if you are avoiding their calls. Your employer and friends will not enjoy being harassed because of your debts. Cash loans already have heavy fees applied to them from the high interest rates. Additional fees will be charged if you choose to extend your loan repayment date or if you miss a payment. These fees coupled with the possible fees from your bank can quickly change a $300 loan to a $600 loan.

If you are considering taking advantage of loans then consider what is truly within your budget. It is not ideal to take out a loan for a car repair when the added charges will then take money in your budget away from other bills. Cash loans should only be used as a last resort and should only be used for paying off a debt, not making payments on a debt.