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The Advantages And Disadvantages Of Cash Loans

What are cash loans?

Cash loans are smaller lending options offered to consumers that are becoming increasingly popular nowadays. These kinds of loans are meant to give you access to small amounts of cash (i.e. from around £80-750) and can be arranged on a same day basis. These loans are often more commonly known as payday loans because they are designed to be paid back in full when you next get paid. So, you are unlikely to actually end up owing the money that you borrow here for more than 30 days or so.

The advantages of cash loans

  • You can borrow smaller sums here than you may be able to borrow with traditional lending products.
  • It is quick and easy to arrange these kinds of loan -- an online application can take just minutes and many customers can get their money same day.
  • You do not have to take on a large long term debt here as the majority of cash loans will be paid back in a month or less.
  • Most cash loans providers charge a simple flat fee for borrowing so you’ll know exactly what your loan will cost you from the word go.
  • These loans do not require security so can suit tenants just as well as homeowners.
  • Loans given here are income based so no credit checks are required which can be useful if you have a bad credit history.
This can be a very useful solution if you simply need a bit of cash to tide you over in a month where money is tight and you need some extra cash before you next get paid.

You don’t have to jump through lender hoops to apply for this kind of loan -- to apply for a loan, for example, you simply need to be over 18, a UK resident and in full time employment with a bank account and debit card.

The disadvantages of cash loans

  • If you do not pay back your loan when it is due and ‘roll it over’ then your costs will rise.
  • The APRs charged on cash loans are higher than those for most standard loan products so if you use this kind of loan for a long time (i.e. keep rolling it over) then you’ll pay out more in the long run.
  • Due to these higher costs this kind of solution should not be viewed as a loan that you use every month -- these loans are designed for occasional use to tide you over when things are tight.

Most people who use cash loans find them a god-send in months where emergency costs or overspending mean that they are short of cash for a few days or months. So, if this describes your situation at the moment or in the future then an online cash advance loan could be a good short term solution for you. Remember, like any loans product these loans are designed to suit specific needs and they work best when you use them as they are meant to be used.