Did you ever felt a temptation to own something but frowned to see the price? This is a situation that every one of us must have faced many times in our lives.
We all know that nothing is free here. What it demands is cash. Cash - it may be in terms of dollars, pounds, franks, or rupees. But the most important thing that has been, in this materialistic world. It is a kind of straight lift towards your dreams and happiness. It happens many times when you are in need of urgent cast and despite of having a sheer business, you do not posses enough cash to make a payment.
The concept on cash arisen from the word - NEED. It was the need for urgent cash that gave birth and wowed cash loans in this expensive world. Cash loan, as the name suggest is the cash provided on credit by a lender. It helps to satisfy the urgent need of the debtor (one who takes loan) and gets the benefit of interest to the creditor (one who provides the loan).
The facilities of quick cash loans dig its feet way back in history. Traditionally cash loans were provided by individual lenders, unlike the modern banks and other financial institutions.
A quick cash loan is always provided in return of some security. The security may vary from jewelry to real estate. It depends on the terms and conditions of the cash provider and the requirements of the cash taker. As such, cash loan comprises of varieties of loans. It may include payday loan, equity loan, home loan and many more.
Payday loan includes quick cash loan to satisfy the urgent need for a short span of time. Usually the span is for 2 weeks and the cash loan ranges from 100$ to 1500$. This payday loan facilitates the consumer to pay the urgent other debts. The interest rate for payday loans differs from jurisdiction to jurisdiction.
As such, it suffers from some disadvantages like exploitation of people already into financial crisis, aggressive collection of amounts, high interest rates and penalties applied in case of late payment or non payment and so on.
Similarly equity loan is the other kind of quick cash loan. It includes a mortgage that is placed in real estate in exchange of cash. For better understanding, lets us take an example. A person owning a house of 100,000$ may need cash. He may put his house as a security for getting 80,000$ in cash.
This security is treated as a property of the lender, in case the re-payment of the borrowed money is not done in accordance with the terms and conditions of the contract. Sometimes, equity loan contract comprises of high rate of interest along with the repayment of the principle amount. Hence, the property is transferable in case of non-repayment of the dues to the creditor.
However, the rate of interest in equity loan is much lower than the interest rate in other un-secured loans.
As such, a quick cash loan bears its own benefits of providing immediate satisfaction to the debtor. These are short-term loans that can be raised in financial crisis. The easy availability along with fewer formalities makes it accessible. Despite of its advantages, its darker side cannot be ignored. Getting trapped in debt circle is a common problem.
Debt circle refers to a position of raising more loans to repay previous loans, which leads to more payments because of increased interest rates and applied penalties. Moreover, the unfair and aggressive means adopted by banks, financial institutions and lenders of getting the repayment worsen the already ruined situation.
The non-repayment may also lead to social harassment, job termination, and guilt-edged lives. Thus, it is quiet important to work upon the techniques of repayment of loans before applying for quick cash loans. Just a bit of caution and planning can save you from a whole lot of worsen situation.