Wednesday, July 31, 2013, AM | Leave Comment
When you need cash for emergencies or other financial hardships there are not a lot of places that you can go to get the money. You can try asking friends or family for help, but this can lead to strained relationships and they may not have the money to lend you. The best bet then becomes to use one of the many financial institutions to get the money that you need.
Each type of lender has their different benefits and weaknesses when it comes to fast cash loans, so it is important to know your options.
The most traditional solution to financial hardship is to go to a bank; that is one of the primary reasons why banks exist. Banks have the most money to lend and they can help you secure a loan to meet just about any situation; however, there are some severe drawbacks to using a bank.
First, they will only lend to people with decent credit, which means that many people that apply for loans will not be able to get the money they need. Since 2008 banks have been even less willing to lend money, so even people with good credit have been turned down.
It may also take a bank several days to make a decision about the loan application, something that does not help if you need the money right now.
Car Title Lenders
For borrowers that have less than stellar credit, car title lenders are one way to go. Here they give money to borrowers based on the value of the car title that the borrower is willing to put up for collateral.
Because the title backs up the loan, car title lenders give out more loans to lower income and high risk borrowers than banks. The problem with car title lenders is that you have to own the vehicle outright, there can be no other claims on the title, and the vehicles has to be a late model that still has some value.
A lot of people that desperately need car title loans will be unable to get them because they are either making payments on the vehicle or the vehicle is too old to qualify.
The easiest group to work with is the payday lenders. They have the most flexibility in who they can lend to, and most people that apply for a loan are able to get it. There are some qualifications that have to be met in order to get the loan, but as long as the applicant has a job and receives direct deposit there is very little chance of rejection.
Payday loans do have their problems. The payday loan system is easy to abuse and easy to get caught in. Often borrowers will take out loan after loan because they struggle to catch up with the fees that they had to pay in order to pay off the previous loans.
Most ethical payday lenders are working to make sure that they give borrowers all of the information that they need to make good decisions about payday loans, but there is still work to be done.
When you need money fast there are limited options, but you should not feel that you have to take a bad loan just to get the money that you need. Most of the time you can take a day or even a few hours and find the right rates and the right lender to get you the short term cash that you need to make it through your emergency.
I am Rhonda Castle, personal finance advisor and debt counselor in Australia. I talk to my clients quite a bit about the dangers and benefits of fast cash loans versus other types of available sources. When my customers need help finding a payday lender I point them to www.loanrangercash.com.au for their expert advice and ethical business practices.