What You Need to Know About Quick Cash Loans
Quick cash loans are marketed as an easy way to get cash in the event of an emergency. Also known as pay day, title, cash advance, check advance, post-dated check or deferred deposit loans, they can cost borrowers a staggering amount in interest and fees. Borrowers should avoid quick cash loans whenever possible. It is important to understand the terms of any loan and discuss the consequences with an attorney before signing anything or accepting money. A quick cash loan is a small loan that often does not require a credit check. The loans must be paid back quickly, usually within a few pay periods. If they are not paid back on time fees can multiply rapidly. In most cases the annual percentage rate (APR) on a quick cash loan averages about 400%, but it can be as high as 5,000%. A standard credit card has an APR of 12% and a standard loan APR is around 7%. In addition to high interest, quick cash loans can often involve extremely high processing and late payment fees. The fees may even exceed the total amount of the original loan. There may be alternatives to quick cash loans: • A small loan from a credit union or local bank may offer better interest rates and more manageable repayment terms. • Shop for credit with the lowest interest rate and be sure to understand any additional fees. • If you have a 401K plan you may be able to take out an emergency loan against those funds. The interest rate is generally low and in some cases the interest may be paid back into your 401K. • If you need money quickly contact other lenders or your utility companies and request an extension on those bills. • Develop a budget and savings plan to help build a buffer against emergencies.