Cash loans get a bad rap, and some of it is fair. Cash loans are distinctly different from many other loan types, especially finance and bank loans. The basic idea with cash loans is that they deal in direct cash to a specific checking account. There are other ways to receive cash loan funds, but they are almost always direct and unregulated. This means that there are no detailed applications or restrictions a borrower needs to fit. This is the case for loans that have collateral, such as a car loan or a mortgage.
Why do cash loans have a bad reputation?
The reason undoubtedly has to do with the high fees. Cash loans have substantially higher fees compared to most other loans and even most personal loans. This is because of the quick turnaround and the lack of collateral.
Most cash loans have a tight window, usually no more than 90 days. This requires full payment within that time frame to avoid extra fees. This is where borrowers get in trouble. They use cash loans as regular loans but they need to be both acquired and used in two entirely different ways.
Why do cash loans have higher fees?
The main distinction is that cash loans are not based on collateral. In simple terms, the only transaction that is occurring is the borrower gets cash. Nearly anyone can be authorized for a cash loan. There are no banking regulations required, such as a credit check, application confirmation, etc.
Some lenders may authorize a credit check, but it is to determine if the borrower has no credit (which is not often a problem, anyway) or absurdly low credit (which shows signs of lending abuse).
Cash loans at MaxLend Loans are not necessarily different from a number of other personal loan types. Many may group cash loans in with payday loans, as for the differences are pretty subtle. Payday loans are designed for a two week or one month window. Repayment is made, for the most part, upon the next pay window. Cash loans encompass any loan that gives the borrower money, in the bank, in a few days at most. This is why cash loans can be hazardous if irresponsibly handled.