Maybe you’re coming up short on rent? Maybe you have to pay your electric bill? Whatever the case may be, you need cash fast.
Unfortunately, there aren’t a lot of ways to get your hands on fast cash. There is, however, one fail-safe option: you can apply for an instant cash loan.
What exactly is an instant cash loan? We’re going to explain that in detail below.
Understanding What an Instant Cash Loan Is
An instant cash loan is a small loan typically used to cover outstanding bills and other financial necessities. These loans can be obtained quickly, usually within a few days of applying.
They’re considered short-term loans, as they usually need to be paid off within a few weeks. That said, terms vary.
Generally speaking, these loans carry extremely high interest rates. There are usually numerous fees tacked onto these loans as well. Note, though, that your exact interest rate will depend on your credit score as well as on the amount of income you make.
Instant cash loans are also sometimes called payday loans. This is because they can help in a pinch when a person needs money but still has days to go until their usual payday. Other names for an instant cash loan include “instant cash advance” and “instant loan.”
The Upsides of an Instant Cash Loan
There are numerous upsides to getting an instant cash loan. The biggest upsides include the following:
Ability to Get Your Hands on Money Within 24 Hours
Generally speaking, you can get your hands on an instant cash loan within 24 hours. This is because applications are quickly assessed and easily approved. Once you’ve been approved, your money will be sent via direct deposit to your bank account.
This is not true with the vast majority of other loans. They typically take weeks for approval. And if you work for money, you’re likely going to have to wait a week or two to get paid as well.
Easy to Apply For
Instant cash loans are extremely easy to apply for. Not only do they require just a small amount of information, but you can also apply for them online. You can literally get your hands on quick cash by sitting down at your computer desk.
Very Few Approval Criteria
Another plus of an instant cash loan is that they have very few approval criteria. In other words, the vast majority of applicants will receive the loan they apply for.
You don’t need to put up any collateral for payday loans. In most cases, just your credit score will be checked. In some cases, not even this will be checked.
That said, if your credit score is checked, it will affect the interest rate on your loan. The lower your credit score, the more interest you’ll pay.
The Potential Downsides of an Instant Cash Loan
While instant cash loans have many upsides, they have potential downsides as well. These downsides include the following:
Exceedingly High Interest Rates
Compared to most other types of online loans, instant cash loans have extremely high interest rates. In fact, it’s common for a payday loan to have an annual APR (Annual Percentage Rate) of 400%. Compare that to a 12% to 30% APR for a credit card, and you’ll see just how costly instant cash loans can be.
That said, if you’re able to pay your instant cash loan off by your next payday, your total interest accused will be quite small. For a loan of around $350, you’ll end up paying $50 to $75 in interest, in most cases, provided that you pay it off by your next payday.
Difficulty Paying Back Full Charges
Generally speaking, when you take out a payday loan, you must pay it all back in one lump sum. You can’t break the balance in half by paying small portions along the way.
This can pose problems for many borrowers, as accumulating the sum of the loan plus interest is difficult to manage with a tight budget.
What happens when borrowers aren’t able to pay the balance back in time? They’re hit with additional fees and additional interest charges as well. Now, they have an even bigger balance to pay off, one that they already struggled to pay off before.
This can create a cyclical effect in which the borrower finds themselves in more and more debt over time. This debt can ruin their financial health in the long run, not to mention their credit score.
In fact, in many cases, emergency cash lenders will have the borrower’s bank account information. Then, on the day the balance is due, they’ll withdraw it, whether or not the borrower has the funds necessary to pay it back. This often results in overdraft fees, and thus costs the borrower even more money.
The Destruction of One’s Credit Score
The final potential downside to taking out an instant loan is that it could destroy your credit score. This will likely occur if you’re unable to pay off your loan in a reasonable amount of time. The lender will send your bill to collections, thus hurting your credit score.
This is why it’s important to pay off payday loans as quickly as possible. You don’t want to risk hurting your credit score.
Need an Instant Cash Loan?
Are you in need of emergency cash? Need an instant cash loan? If so, we here at Kingcash have you covered.
Through our website, you can get your hands on an instant loan. This will enable you to pay outstanding bills and stay current with your finances.
Learn more about our loan process now!
