Are you in a difficult financial position? Are you considering opting for a fast loan?
Fast loans are a great option for someone who is in need of urgent cash. They are ideal for emergency situations and rainy days. However, just like all other forms of loans, there are some pros and cons of opting for express loans as well.
If you are planning to get a fast loan, then here are the important pros and cons that you need to know about.
The Pros of Fast Loans
Here are some of the most common reasons why people turn to fast loans in times of need.
1. They Are Easy to Access
First things first, express loans are easy to get. In fact, in many cases, you may be able to get the money you need within a day or even before. They don’t have extensive approval procedures like banks and other lending institutions that take weeks and months for the approval of loans. You can get quick cash, so they are convenient for people who need money immediately.
2. There Are Fewer Requirements
Another reason why many people opt for fast loans as compared to other types of loans is that there are fewer and simpler eligibility requirements to meet to acquire this loan. You don’t have to fill in any long applications for these loans. In fact, it hardly takes more than five minutes to apply for fast loans. Each lender has different requirements, but they are simple ones and you don’t have to face any issues meeting these.
3. There Is No Credit Check
You don’t need to have a great credit history to get fast loans. Most of the fast loan companies don’t pull out your credit history before approving your loans. Thus, you don’t have to worry about any hard credit inquiry before you get a loan. You also don’t have to worry about your credit score reducing any further because of credit inquiries.
The Cons of Fast Loans
While fast loans are convenient and easy to get, there are some cons associated with them that you must know about. Make sure you read and understand these disadvantages of fast loans before you opt for one.
1. They Are Expensive
Since express lending companies are offering you immediate cash, they also have a high-interest rate. The interest rate for each fast loan company is different, but it can go as high as 4000% in some cases. Therefore, before you go and get this loan, make sure you understand how much interest you will have to pay on the amount you are borrowing.
2. They can be Predatory
Many people consider fast loans as predatory. They call them unaffordable and misleading. Many people end up in a cycle of debt when they opt for fast loans. New additional fees are added if you are not able to pay the loan within the given time. Thus, you end up getting more loans to pay off the previous one and the cycle continues.
3. They Don’t Help Build Credit
Another disadvantage of getting a fast loan is that you are not able to build your credit score even if you pay back your loan on time. Since most lenders don’t check your credit score before approving the loan, they usually don’t impact your credit score positively.
These were the pros and cons of fast loans that you must keep in mind when you are applying for one. It is important to know all the terms and conditions of the loan before you go on and sign anything. Only choose reputable and trustworthy fast loan companies to ensure that you don’t get into any legal trouble later on.