Emergency Short-term Cash – A Review of Payday-type Loans
Posted by BC-Loans
Payday loans are great sources of emergency funding if you are employed and need the money for an unanticipated expense. The loans are often secured before one’s payday in order to handle such unexpected situations as repairs, medical mishaps, or to pay a past-due utility.
When a payday loan is used for an emergency, it permits consumers to maintain their cash flow as well as keep up with their expenses. Because the interest rate can be quite high, the loans are designed to be repaid before the recipient’s next payday. Typically, customers must be at least 18 years of age, have been on the job for at least a year, and make at least $1,200 monthly.
Title Loans Can Also be Used for Emergency Funding
While a payday loan usually works for people who may not have a lot in the way of assets, a title loan is a good choice for any individual who owns a vehicle free and clear.
Types of Collateral
Referred to as an automobile equity loan, a title loan is a type of short-term loan that allows borrowers to collateralize the financing with their automobile or similar mode of transportation. Because the loan is secured with a car, van, truck, motorcycle, or even a piece of farm machinery, the interest rate is typically affordable.
A Source of Quick Cash
Once the vehicle and title are checked, you can get the funds either the same day or within a 24-hour period.
Stay with the Payment Schedule
Payday loans and title loans can be well-utilized in situations where the borrower has a poor credit score, needs cash now, and has gainful employment. So, if a loan recipient makes his payments on time, he’ll generally be rewarded with discounts or a lower rate of interest if he reapplies.
Emergency Short-term Cash – A Review of Payday-type Loans and Auto Equity Financing
It’s Best Not to Use a Payday Loan for a Frivolous Expense
If you like the idea of getting quick cash and are planning to use the money from a payday loan or title loan for a vacation or for a home renovation, you may want to reconsider your options. Payday loans, in particular, are better to secure, if you really need the money now – or you’ve run into a problem, such as a plumbing leak, a malfunctioning furnace, or a disconnect notice from a utility.
Payday loans and title loans definitely can be lifesavers for the people who use them for their intended purpose, or for emergency cash. If you need a loan for financing a vacation or a remodeling project, you can always secure the money at a much lower rate of interest through a second mortgage or a personal line of credit. Review the various options before you apply.