Only 40% of Americans have the savings to cover an unexpected expense of $1,000, according to a Bankrate survey. And 60% of us would have to scramble for money if we had to visit the emergency room, replace a home appliance, or repair the car.
It’s no wonder short-term lending is a $90 billion industry in the United States. When the unexpected happens, such as a family crisis or job layoff, people often have to look for ways to make ends meet.
This is where fast cash loans enter the picture. Short-term, “small-dollar,” fast cash loans give you some much-needed cash flow until your financial situation improves.
Also called payday loans, cash advances, and instant loans, a fast cash loan can serve as a bridge in a tough time and help you cover unexpected costs-but only if they’re used properly. If used irresponsibly, fast cash loans can send you spiraling into more and more debt.
Before you apply for a fast cash loan with an online lender or payday loan provider near you, let’s review the pros and cons of these popular loans.
You’ve probably seen payday loan stores in your town. You can either apply in-person at one of these locations or fill out an online application.
Getting a fast cash loan online might be the better option since it allows you to shop around with various online lenders to find the best terms and conditions.
With fast cash loans, you typically don’t need collateral, which many traditional loans require. However, you may have to provide proof of income, Social Security number, checking account information, and other personal details such as your email and physical addresses.
Loan application decisions take anywhere from a few minutes to a few hours. Many lenders deposit the money into your account within 24 hours, but sometimes it can take several days.
Borrowers with low credit scores may have trouble accessing lines of credit, like credit cards. As Experian notes, borrowers with scores under 580 “may not be approved for credit at all.” They may be able to get a secured credit card, but that won’t provide emergency relief.
How can people with bad credit get cash quickly when they’re in a pinch? Since fast cash loans are available to borrowers with bad credit, they fill a considerable gap in the private loan marketplace.
The average size of a fast cash loan is generally $500 or less, according to the Federal Reserve Bank of St. Louis. Most folks borrow anywhere from $100 to $1,000.
The amounts are relatively low because they’re meant to cover a specific range of common unexpected costs. For instance, if you can’t work due to illness or a natural disaster, an instant online loan can give you the money you need until your next paycheck.
In short, fast cash loans aren’t large installment loans, like mortgages or auto loans. They’re meant to make ends meet temporarily. Don’t expect to get much more than $1,000. And you probably would not want to borrow more than that due to the high interest rates.
If you need more than $1,000, you could qualify for a personal unsecured installment loan-even if you have less than perfect credit. At Personify Financial, our personal loan amounts range from $1,000 to $10,000.
Payday loan lenders typically charge financing fees from $10–30 for every $100 borrowed, according to the Consumer Financial Protection Bureau (CFPB). Actual financing fees will vary depending on your state’s laws and regulations.