Lots of us have been there, an unexpected expense arises, and we need cash fast. Sure you can sell off some old items on Offerup.com but unfortunately, that isn’t as quick as the cash could be needed. An online marketplace sale could take a whole week, or even a month, so if you need money, let’s say for gas or a car repair to get to work, you are SOL. In this article, we will go over some options for quick cash as well as their pros and cons. We will also be covering loans, so that means, no credit cards or other types of activity, but instead, looking at ways to get cash in hand, quickly.
What are Fast Cash Loans
To simplify a lot of this explanation, a fast cash loan is a short-term, easy-to-apply for and acquire loan. The good thing about most of these loans is that the cash becomes available almost instantly, you do not need credit history to get one of these loans, and often times they just hand over cash. These loans could be either secured or unsecured–secured loans being collateral is needed to get the loan, such as a title loan or a pawn, whereas unsecured is generally a loan that just looks at financial history. The biggest downside of these quick cash loans is that they could have higher interest but in turn, has short terms, so they will not rack up much interest over time.
Payday Loans
The first type of fast cash loan that makes it possible to get quick cash is the payday loan. This is pretty much what it sounds like: an agency gives you cash up front, and you work out a way to pay them back on your next payday, with interest and fees. This payment is usually worked out as either a post-dated check or by setting up auto-pay. These are often times called payday advances.
Pros
These types of payday loans have quite a few advantages, for example, and most notable, is that they are easy to access, meaning that you do not need good, or any, credit, just a job to secure this cash advance. This means that they don’t check your credit, rather, ensure you have a job, and cash is handed out. Another big advantage to these types of loans is that they are unsecured, and do not need collateral to support them.
Cons
There are a few cons that come with payday loans, most notably that since they are not collateral backed, they are oftentimes more expensive than your standard personal loan. Another major issue with payday loans is that they could be bad for your credit, and in many cases, those needing and using payday loans are the ones needing to improve their credit. These types of loans could start a vicious cycle of growing debt, since by the time you pay it from your next paycheck, then you already desperately need that money. Furthermore, according to Bankrate, you should avoid these types of loans, although we believe that if you are desperate and have nothing of value to pawn, and no vehicle, then this is a good option. (https://www.bankrate.com/banking/savings/legitimate-ways-to-find-fast-cash). It must be said, one of the worst parts of payday loans is they could have huge APRS, possibly even up to 400%, which makes this fast cash option a steep one.
Pawn
Next, we’ll talk about pawning, and being a pawnshop here, this is of course the one we know best. Pawning is a secured loan, meaning it is backed by collateral and could be as little as $5 and as much as $50,000. Most pawns live in the range of $100-$1000 though. It is common for people to pawn jewelry, electronics, instruments, tools, and guns, all of which are almost always accepted in any pawnshop. Many pawnshops, like us here at Jum-Pawn-It, will accept anything of value in fact. Pawn’s loan terms vary from state to state but in California, the length of the loan is 4 months with a 10-day grace period whereas in Arizona the loan is 3 months long.
Pros
There are many pros to pawning, for example, a pawn doesn’t check credit, and especially doesn’t hurt your credit. Whereas most loans go into collections if unpaid, a pawn just puts the pawned item up for sale to recoup its investment. This means that they completely bypass collections, and so do you. On that note, pawning is great if you have bad credit since they will not check or know what your credit is. Another huge benefit is that pawns allow for small loans that have small repayments, for example, if you just need gas to get to and from work, you can borrow 20 bucks for a week. Not many loans give the flexibility of securing small loans as pawns do. Pawnshops generally take any item of value, so it is generally easy for someone to find items of value that transport easily, usually this is jewelry or guns, both of which can secure you a few hundred dollars and are items that fit in pockets.
Cons
The main con with pawning is that if you are unable to pay back the loan in the set time (which is usually set by the state), then you lose your item, which could be horrible, depending on what the item is. For example, a wedding ring would be the nearly worst case. The good news is, you don’t actually have to completely pay pawns back at the duration of the loan terms. If you do not have the amount of money needed to get the items back, you can just pay a small amount to rewrite the loan. For example, if you borrow $100 bucks and owe the pawn shop $110 to get your item back, you can pay them $10 to rewrite the loan and get yourself another loan that lasts for the duration of the original loan. Another con is that you do not get to keep the item when it is pawned, the pawnshop assumes ownership, so unlike title loans where you still drive your car, the pawnshop will take your car into their possession for example. Lastly, a con for pawning is that you are not able to redeem your items using credit cards, all loans must be paid back in cash or possibly, an ATM card, this is because you cannot pay credit with credit in most states.
Title Loans
A title loan refers to a fast cash loan that is given based on your car’s title. Like pawning, this uses a type of collateral, in this case, specifically your car. These loans usually give out 25% of the car’s value so most people are borrowing around $3,000 to $5,000 per loan. It is an important point that most title loan agencies have a minimum amount, often around $2,000.
Pros
Like with the other forms of loans, this is a quick way to get a cash loan, unlike with pawning, you get to keep your car for the duration of the loan. This is especially good if you need your car to get to work, or even for work, such as being an Uber driver. Another benefit to this type of loan is that it barely checks your credit, if at all. So although it is not as good as pawning that does not check your credit, it definitely is better than payday loans in that regard.
Cons
Much like pawning, the main problem here is that if you are unable to pay back the loan, then you lose your item, in this case, it is a car. Another big issue with this type of loan is that it comes with high interest and fees, which can be worse when the loan amount is in the few thousand.
Other Loan Options
There are many other fast cash loan options, both fast cash and otherwise. For example, many people get credit cards and rack up debt there, and although credit cards could be a useful financial tool, they often get people caught up in ways where they will never catch up. We strongly suggest that if you are not knowledgeable in personal finance, then you should only have cards with low credit limits, such as $300-$500. Another loan that could be of use is home-equity loans, but since these require homeownership then they are hard to secure. Debt consolidation loans are a great option if your goal is to get ahead of your debt, since they specifically set out to lower high interest loans. Lastly, there is the ability to borrow against either your retirement (401k) or life insurance if you are desperate and have either of these, but beware, these could cause issues and also could come with penalties and taxes (https://www.nerdwallet.com/article/finance/money-legitimate-ways-quick-cash).
In Closing
We might be biased, but we believe the best bet for a quick case is a pawn. Grab an item that is valuable and stop by your local pawnshop. For any more questions on how pawning works, stop by any one of our five locations or shoot us a message or a call.
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