Unlike most loans, which are paid into your bank account, a cash loan is exactly what it sounds like. It’s a lump sum handed directly to you in cash. Usually, if you’re accepted for a loan from a high-street bank or building society, the sum you borrow will be paid into your bank account.
By contrast, actual cash loans are either paid out by an agent who visits your home or over the counter in a high-street branch, if the company has premises. You will also be expected to make your repayments in cash. These are typically collected by one of the company’s agents when they visit your home every week or month.
Cash loans for
These loans are ideal for people who don’t have bank accounts; for example, those on low incomes or who are unemployed. It can be very difficult to gain approval for a traditional loan if you don’t have a bank account. This makes receiving and then repaying a loan in cash the perfect solution.
The fact that repayments are physically collected by a company representative can also appeal to those borrowers who prefer to interact face-to-face, rather than dealing with electronic payments and online applications.
Many people find it easier to budget their repayments if they know exactly when the agent will be calling and how much cash they need to pay.
Is this a payday loan?
The term ‘cash loan’ is often used to describe a payday loan, where the loan is repaid in one lump sum within a very short space of time. These loans are usually taken by people who have run out of cash and need funds to tide them over until their next payday, at which point they repay the full loan amount.
This type of loan can be very expensive because of the fees charged by the lender. However, this isn’t the case with all cash loans. Some, such as those offered by Provident, are paid back in regular, manageable instalments.
How much can I borrow?
It will depend on your circumstances. Typically, cash loans are small sums, usually between $100 and $1,000, which are repaid in affordable instalments.
Before the loan is approved, you will have to complete an application, usually involving a face-to-face interview with a representative from your chosen finance company. The interview will either take place in your home, making it very convenient if you don’t you’re your own transport, or in the loan company’s offices.
Most cash loans will require a credit check, but most lenders will be more concerned about whether you are able to afford the repayments. They will ask you about your income and outgoings, which allows them to build a picture of whether you will be able to afford to repay the loan.
If your application is approved, the loan amount will be paid to you immediately in cash. Another factor that can make cash loans appealing is the fact the money borrowed is available instantly.
Most cash loans are unsecured, which means you don’t have to use your home or possessions as collateral.