Cash Loans Compared
If you need hard cash, fast, then a cash loan could be what you are looking for.
Cash Loans Summary:
Here’s the facts on what you should know:
- Good fast cash loan option.
- Online mainly but some offline providers .
- Must be over 18 years old.
- The better your credit rating, the better your interest.
- High interest rates. Timely repayments are vital.
Read the full guide below, or skip to the best rates.
What are cash loans?
Cash loans are loans that do not go directly into your bank account, and your payments do not go out through your bank account – it is all done in cash.
An agent of the loan company will visit you with the cash in hand when you are loaned the money, or the agent will hand it to you over the counter if it is a high street branch. Likewise, when you make payments, you do so by visiting the branch with the cash in hand, or an agent will visit you each week or month at your home to pick up the payment.
Get cash loans for unexpected costs
Cash loans are expensive compared to other loan types, so they are generally used for unexpected – but important – expenses. It’s always a good idea to save up for emergencies, but this isn’t always possible, and sometimes emergencies come in inconvenient clusters. When you need cash in a hurry, and you don’t mind paying a higher rate for the convenience, a cash loan is a great solution.
Keep up your cash loan repayments
A cash loan can be the solution to an immediate problem, but what you don’t want is to turn it into an even bigger problem. It is very important that you keep up on your payments. If you don’t, you will be charged late fees, penalties, the interest will drag out, and you may wind up in court – not to mention the damage to your credit history.
Luckily, most cash lenders have a simple set of repayment options, so that you can choose the one that best suits your budget and situation. Lenders do not want you to fail – in fact legislation limits them to only lend money if they are satisfied that you have a reasonable ability to pay it back. There are bad eggs out there, to be sure, but most lenders operate within a simple model: they lend you money, collect fees and interest, and you pay them back. Simple is best for both sides of the agreement.
Is a cash loan the same as a payday loans?
No, there are some differences – though sometimes the term “cash loan” is wrongly applied to payday loans.
The main difference is that payday loans are not always paid out in cash, and repayments are usually made through a direct debit arrangement. For payday loans you will also need a bank account, whereas cash loans are often given to people who do not have a bank account at all, or choose not to use one for the loan.
Who are cash loans for?
Cash loans are for people who prefer face-to-face interactions to online applications and contact. They are also for people who do not have a bank account, or do not want to use a bank account for the loan and repayment. Cash loans are often given to people with a poor credit history, or no credit history – for this reason though, they are also among the most expensive loans to take out.
Why would I need a cash loan?
You might need a cash loan to tide you over to your next payday, or to cover an emergency expense. The most common emergency expenses are car repairs, but you might also need repairs done to your home, a piece of equipment for work, or even to take advantage of a deal that is only available for a very limited time. In some cases, the cost of the loan is cheaper than missing out on a good sale price or opportunity.
If you find yourself in a tight spot – like needing your car for work, but it just failed its MOT – then a loan like this might pull you through to the other side of the crisis.
How much can I borrow?
Cash loans are usually for modest amounts, and tend to be between £100 and £1000. Unlike most payday loans, cash loans do not have to be repaid in one lump sum, but are usually arranged over a number of regular instalments.
The amount you will be able to borrow, and the interest rate you will be offered, are each determined by the lender. The lender will consider your credit rating, your income and expenses, and any other factors that might affect your ability to repay the loan.
The key for most lenders is your ability to make the payments. A poor credit history will not necessarily be a problem – it will just cost you a little more.
Things to consider before applying for a cash loan
Consider your alternatives. As we said, these loans tend to be among the most expensive, so if you are able to get the money from friends or family, it will be easier on your budget. Also consider if you need the money right now, or if you can put off the expense until a later time – without making it worse.
If you determine that you definitely need a loan now, and have no cheaper options, then shop around. Don’t deal with someone who makes you uneasy, or who seems dishonest. Also avoid deals that are too good to be true. Find a reputable lender – our comparison service can help – and ask all of the questions you need to before signing. Remember that you are the customer, buying a loan just as you would buy a car, an appliance, or a new pair of jeans. Choose what you need, and don’t feel pressured to take a bad deal.
How to apply
Some cash loan companies have an online application, and some require in-person contact at a branch or through an agent visiting you in your home. In either case, it will increase your chances of getting a loan, and a better deal, if you prepare a little first.
Make a list of your income and another one of your expenses. If you can show how much extra money you have each month, it will assure the lender that you can afford a payment of that size. It helps to have pay slips on hand, your lease documents, bank statements if you have them, and any other documentation or information that can help them make their decision.
Just being organised enough to have this information on hand will set the tone in your favour.
Are weekly or monthly instalments best to repay the loan?
That depends on your individual situation. Weekly payments are smaller, and feel more manageable, but if you are paid monthly, it is often most comfortable to pay once, just after payday, so it is taken care of when your bank account is stocked up, and that way you won’t miss any payments, or have to pay any penalty fees to the lender, or to the bank. If you make an agreement to pay in cash, then it is also important to have the cash on hand at the proper time. Allow yourself time to go to the bank machine or counter to take out the cash from your account, or to collect it from your employer if you are paid in cash.
In short, pay as soon as you can, but leave a little buffer to allow for minor delays, like a trip to the bank machine.
Cash Loan versus short term loans
Cash loans are usually more expensive, and for smaller amounts. Some high street lenders also see use of cash or payday loans as a sign of poor financial health, and it can damage your ability to get a loan from them. Short term loans are seen as more affordable, and therefore a better financial decision. They are not likely to harm your ability to get a larger loan later.
Can I get a cash loan with bad credit history?
Yes, you can – if you can demonstrate ability to repay the loan. You aren’t guaranteed a loan, and if you get one it will be more costly due to a poor credit history, but they are available. You can check your credit history here or read our guide on improving your credit score.