Online Lenders Take the Personal Out of Personal Cash Advances
You can now borrow money through the internet, which is convenient, but online lenders take the personal out of personal cash advances. When you borrow money online, everything will be taken care of remotely through your computer or favorite internet accessing device. In fact, you may not even speak to your lender on the phone or online.
Online Personal Cash Advances Make Lending Streamlined and Impersonal
Online personal cash advances generally feature a streamlined application process, one that usually takes just minutes to complete. While this makes requesting a loan fast and easy, it also makes it impersonal.
What Lending Used to Look Like
Provenir reports that holding items as collateral is one of the oldest forms of lending, making early lending a personal transaction. To borrow money, a borrower would have to bring the lender something of value. This decreased the risk to the lender. During the middle ages, the rich lent money to borrowers who then worked off what they borrowed.
In the early 1800s, the Philadelphia Savings Fund Society came into existence. It was set up to give everyday people access to loans, offering them an easier way to save money. The late 18th century saw the building of societies. In this case, people paid monthly membership subscriptions, which covered the cost of building the homes of others.
What Lending Looks Like Now
Technology and the use of data has transformed lending into an automatic process, one that has lost its personal touch. While borrowing money is no longer a personal thing, it is safer for everyone involved. A lender is able to vet a borrower thoroughly before depositing a loan in his or her checking account. Also, borrowers can use the internet to make sure that they’re requesting money from a legitimate lender.
In addition to conveniences like direct deposits and fast application processing, today’s lending also features handy options like being able to make your payment automatically from your checking account. Many lenders also have software that allows them to withdraw it from your bank account.
The Online Lending Application Process for Personal Cash Advances
When it comes to the application process for personal cash advances, NerdWallet reports that before applying, you should check your credit score. Financial institutions tend to rate credit scores in four categories, which are excellent, good, fair or average and bad.
Knowing what yours is will help you determine how easy it will be for you to receive loan approval and how costly it could be. If your credit score is on the low side, then you may still qualify for a personal cash advance, but you will likely pay a higher annual percentage rate, or APR, for the loan.
Shop Around for a Personal Loan
To shop for a personal loan, assess available loan amounts, interest rates and monthly payment terms. Check with your bank or credit union as well as other financial institutions. If you’re a borrower with bad credit, then credit unions and online lenders will likely be your best bet for a loan.
Once you’ve found a personal loan that works for your situation, set aside a few minutes for the application. The form will likely ask you about the amount you wish to borrow, your income and age. You may also need to share your banking account information and address.
Read the Terms of Each Loan Offer
With any kind of financing, it’s important to read the fine print. Check for prepayment penalties. Most online lenders don’t charge for paying a loan back early, but it’s a good idea to confirm that your lender won’t.
Also, look for automatic withdrawals. Some online personal cash loan lenders require access to your checking account to complete automatic withdrawals. If your lender does, then it might be wise to ask your bank to set up a low balance alert for you. This will help you avoid overdraft fees.
What Kind of Purchases Should You Make with a Personal Cash Advance?
Personal cash advances are a financial product meant for emergencies. If you’re suddenly facing a car repair or an unexpected medical expense, then a personal cash advance may be the thing that keeps you going until your next paycheck.
Keep in mind that this type of loan is designed for short-term use, so be sure to pay it back by the due date. If you fail to repay it on time, then you’ll be at risk of falling into a cycle of debt.
Things to Know About Personal Cash Loans
U.S. News reports that personal cash loans are often expensive because you’ll wind up paying a fee for the loan. Personal cash advance lenders typically charge around $15 for every $100 that you borrow. Also, keep in mind that you’ll probably be required to pay the loan back in two weeks or by your next payday. These are the kind of loans that people tend to roll over. Rolling over a personal cash loan often results in a cycle of debt.
Alexander Stern, a consumer attorney in Berkeley, California, said, “A $1,000 loan can balloon into three times that amount given enough time and interest.” He went on to say, “Advertisements highlight the best parts of a product and rarely discuss the worst aspects.”
Embrace a Faceless Personal Loan Process
While a personal touch would be a nice service element to the personal loan process, finance companies aren’t about to change a system that works so much in their favor. Because of this, most borrowers will be forced to embrace a faceless loan application process.
If you have questions, you can contact your lending company by phone or email. Personal cash advances are financial products that most people seek when a financial emergency has caught them off guard. To learn more about them, visit the Personal Money Store.