Obtaining a short-term cash loan is a great way to shore up your finances in the event of a financial crunch or emergency.
Cash loans are easy to obtain. Applying for one takes only a matter of minutes and you can have your money in less than an hour. It is important to remember though that cash loans should only be used when they're absolutely needed. There are a few risks you should understand before you pursue a short-term cash loan.
High interest rates: Cash loans carry very high interest rates. Often times annual percentage rates (APR) on car title loans can range as high as 200% while payday loans can carry rates from 300% to 900% and some lenders may charge even more.
Losing your car: If you secure a cash loan against your car's title, you could risk losing it if you fail to make timely payments. You should be absolutely certain you can make payment on time before you put your car up as collateral.
High transaction fees: Consider also there may also be substantial fees for every transaction you make. Make sure you weigh that along with the interest rate into the final cost of the loan.
Rollovers: In addition to paying exorbitant fees if you cannot repay a loan on time, it may also roll over into a new loan with even higher interest rates. Make sure you read the terms and conditions carefully before obtaining any cash loan.