Cash loans refer to loans of a small amount of money. Cash loans usually put an obligation on the lender to pay the loan back over a shorter period of time possibly requiring full payment on the lenders payday. Cash loans also typically clear within 1 – 3 days or in the vicinity. Cash loans are gaining in popularity amongst lenders although they have been the source of controversy as many companies offering these types of loans do not do their thorough research to ensure that the lender can afford the cash loan.
Cash loans are popular for their quick turnaround time. Although cash loans have been the source of controversy their rate of interest is usually not too far and sometimes even less than what is offered at financial institutions offering long term loans. However, cash loans generally have steep hikes in interest rate where the lender is unable to pay the cash loan on the agreed upon date although this is not always true.
Research has shown that cash loans are generally taken out by people who have lower incomes and a bad credit history. Owing to this, these people are unable to access other loans over and above cash loans. Where cash loans have extremely high interest rates this impacts these types of lenders extremely owing to their financial situation and inability to look anywhere else for temporary financial relief.