Understanding the Pros and Cons of High Approval Loans

Need cash fast?  You can get a short-term loan with relative ease and little complication.  High approval loans, sometimes called “Payday Loans” or “Cash Advance” loans, were developed and designed to help people with short term cash needs and emergencies.  Getting approval for these loans are easy, but high approval may come with a high cost.

Unlike auto loans or home loans which need a wheelbarrow full of documentation, good credit, and collateral, high approval loans usually only require that you have a bank account and proof of a steady job.  Collateral for your short-term loan is your job, and a bank account helps the loan company assure repayment.

Pros

High approval loans are usually used for emergency cash needs or financial crisis when money is needed fast, such as:

•    Rent or mortgage payments
•    Car payments
•    Groceries
•    Cover overdrafts
•    Make credit card payments

Fast application process – The application process is easy and requires only copies of your recent paystubs and your latest bank statement.  No credit check is requested. 

Apply online – You can apply in person at a number of convenient locations in metropolitan areas, but you can also apply online quickly and easily.  You simply complete the application form with your job and bank information.  The loan company will usually inform you of the maximum loan you are eligible for based on your income.  Then the loan company verifies the information you provided and makes a deposit into your bank within 24 hours.

Easy approval – Approval for a small short-term personal loan is easy.  All you need is a verifiable steady job and a bank account.  Applicants must be over 18 years of age, and often a minimum monthly income is required, usually around $1,000.  No co-signer is needed with short-term personal loans.

Cons

Your short-term high approval cash advance loan can come with a high cost.  Though loans are easy to obtain, they are usually due for full payback within a short period of time, and at an extremely high interest rate.  If you are in need of a high approval loan for fast cash, consider what you may have to pay for the use of that advancement. 

Strict due dates – High approval loan companies that offer cash advances and payday loans are strict with their due dates.  Many terms are dictated specifically by state regulations, however, to protect the consumer from long-term high-interest loans.  When you apply for a high approval loan your term is determined by when your next payday or paydays are scheduled.  Usually loan funds plus interest is due within 30 days.

High interest – That small $200 loan could cost you over 100% in yearly interest!  High approval loans usually charge approximately a 10% or 12% fee for a 30 day short-term loan.  Translated into yearly percentage rates this could mean up to 144%.

High penalties – If you miss your payback date you could be slammed with a high penalty fee.  Usually $30 to $50 may be charged for missing your scheduled loan payment.

High approval loans can be helpful and an easy solution in a financial crunch.  But be sure to know the cost for borrowing funds and consider whether you can afford the price of high approval easy cash.