There are different loans and understanding them helps you make a decision. All cash loans are not the same and they have different payment procedures in place. However, all cash loans can be referred to as short term loans as you are required to pay over a short period of time; ideally on your next pay day.
Types of different cash loans:
Fast cash loans
These are cash loans whose approval process is fast. You are able to get your loan approved and transferred to you within a few hours. These loans are done via online banking. They are very similar to same day loans which have an easy application and processing time. They are more or less like the fast loans because loans are processed and released on the same day. Other similar cash loans include the fast approval loan, the easy cash loan and the instant cash loan offered by private lenders and institutions.
Payday loans
Payday loans are available in private lending store or online. This type of loan requires someone with a steady income or job and it can be quickly obtained without much paperwork.
This is ideal when you need some cash to pay on a short-term basis. This money is lent to be paid on your next payday. Payday loans help you solve cash emergencies which cannot wait until payday. The amount of your payday loan should be a percentage of your salary where you will be able to repay with your salary and have something to survive on for the rest of the month or week.
Payday loans are short-term loans used for needs that arise in between paychecks. However, the payday loans are discouraged because of their high interests which lead to high costs. The only problem is that if you get a payday loan this month, you will most likely need a loan again next month because you will have very little to get by after you pay the current loan. Hence, repeat borrowing of payday loans is greatly discouraged.
Bad credit loans
These are loans designed for clients with bad credit history. Your credit history determines how credit worthy you are so with a bad credit history in most areas you can be considered as ‘un creditworthy’ candidate, making it difficult for you to access a cash loan. A bad credit loan may be the only option you have to access a loan.
These loans are obtained from institutions or private lenders as banks do not offer these services. The loan has some charges on top of high-interest rates. If the borrower manages to pay this loan on time, his or her credit score improves.
Unsecured loans
This is the kind of loan that no collateral is required for you to access this loan. Unsecured loans are easy to access as the lender takes your word as a guarantee. The main characteristic of an unsecured loan is that it has a high-interest rate, mostly for people who are credit worthy and ideal if you do not have a valuable asset.
Secured loans
These are quick loans which require you to put down collateral such as your home, car or jewellery. This means if the loan is not paid back, the lender can sell your collateral to recover the loan money. A secured loan can easily be negotiated on the interest rates and other terms of the loan.
Borrowing from family and friends
Of course, this can be a type of cash loan you can consider. It may appear as a good option because your family or friends can understand you and sometimes will not charge you any interest depending on the amount you borrow and the duration of the loan. However, this is not encouraged as it may turn relationships sour when repayment is not handled properly. If you have to borrow from your family or friends, sign a promissory note that will protect both of you to keep your borrowing professional.