Cash Loan Lenders

Online loan lenders


March 20, 2016

Lender’s Finance Charge

Lender's Finance ChargeAt one point or another in your life, chances are you will find yourself short on cash and facing an emergency. Not matter how well you plan, unexpected things always come up. Unless you have a large emergency savings fund, coming up with cash to cover these unforeseen expenses can be a major challenge.

Short term cash loans are one option that you may want to consider. As you might guess from their name, these loans are given on an extremely short-term basis. Unlike most loans you can get from a bank that are paid back over a long period of time, these cash loans usually have to be repaid in a matter of days or weeks.

They may have a flat fee associated with borrowing the money, or they may include interest, depending on the terms of the loan. In most cases, however, since they have to be repaid so quickly, most lenders opt for a finance charge rather than interest.

The basic process starts by taking your most recent paycheck stubs, a photo ID, and your checkbook into the lender. As long as you meet their borrowing standards, they will then tell you how much money they are willing to loan you. If you agree to their terms, you will then write a post-dated check for the amount that you are borrowing plus the lender’s finance charge.

This is sometimes easier to understand with an example. Say, for instance, that you needed to borrow $200. The lender checks out your income and bank account information and agrees to provide you with the loan. The finance charge for the loan is $30, and it is due in full in two weeks. You then write a check that is post-dated on the due date of the loan for $230. When the date arrives, the lender deposits the check and the money is taken out of your bank account.

As you can well imagine, there are few dangers associated with these loans. First and foremost, you need to be sure that you are going to have enough money in your bank account to cover the check. Otherwise, it will bounce and you will find yourself facing far more fees.

Additionally, the finance charges on these loans are generally incredibly high considering how quickly they have to be paid back. When you crunch the numbers, it is easy to see that you are paying an extremely high rate of interest on the loan.

Despite these drawbacks, however, these loans can be a real lifeline in an emergency situation. As long as you know what you are getting into, they can be a good way to get out of a financial bind.

Short term cash loans should only be used to cover expenses that come up unexpectedly and that are true emergencies. They should not be used frivolously as a way of getting extra spending money for things that are not necessities. It is too easy to get in over your head with these loans to justify the risk unless you truly need the money.