In Canada as well as nearly any other country, cash loans are a great way to get money as quickly as possible without having to wait for your next paycheck. They tend to be best used in urgent situations, where a lot of money needs to be paid upfront for something, but you don’t have the funds at the moment.
While these loans tend to work fairly well, there are still some precautions that you have to take before you decide to make use of a cash loan. You don’t want to get yourself into trouble by piling on more debt.
Read more: Benefits of Short Term Loans.
Repay as Quickly as Possible
Since cash loans tend to be short-term, you want to repay them as quickly as possible. You still have the option of paying off these loans over a longer period of time than a couple weeks, but what ends up happening is that you start paying extraordinarily high amounts of money on interest. This is something that you don’t want to get caught in, so you need to be absolutely certain that before getting a cash loan, you’ll be able to pay it off in full with a couple weeks to a month. Otherwise, you’ll end up in a worse position than when you started.
Be Aware of High APR
As touched upon in the previous section, high APR can end up biting you pretty severely if you’re not careful. If you don’t pay off the full balance, you’ll end up having to pay extremely high interest rates for the next billing cycle. For short-term cash loans, this is unavoidable since they’re not designed to be used for anything other than getting cash as quickly as possible. In any case, make sure you’re aware of the interest rates that you’re facing if you don’t pay the full balance.
Most cash loans require that you have some proof of full-time employment and/or stable income, as well as being over the age of 18. They’re taking enough risk as it is considering the nature of a cash loan, so they need to make sure that you’re able to pay off your loan in a relatively short period of time. Otherwise, they end up losing money, and you end up with crippling debt. So, once again, be absolutely certain that you have the income to back up the loan you’re taking out.
Not all companies in the business of providing cash loans do so honestly. Since they are a business, it’s in their interest to make as much money from their clients as possible, and some of them do this by misleading the clients into thinking they’re getting a better deal than they really are.
Boring as it may seem, be sure to read the fine print. You don’t want to have any hidden fees imposed upon you, and more importantly, you definitely don’t want to get ripped off, especially if you’re taking out a significant amount of money. In short, be careful and think critically about what you’re getting.
Read more: Protect Yourself from Cash Loan Scams.