14 MARCH 2018
What are the things you need to think about before getting a cash loan?
Hi, Buck here, welcome to the Superloans Blog! When we were thinking about topics that we could write about to inform our inquisitive customers, this one was at the top of the list and it’s one that we deal with on a daily basis!
Ever thought about getting a short term cash loan? You’re not alone! Every day lots of kiwis come into our branches for short term cash and pawn loans. For many of them it’ll be their first loan. If you’re a potential first timer, we think there are a number of things you should think hard about to make sure getting a personal cash loan is the right thing for you to do. It’s not something that you should rush into without considering the requirements of the agreement you’re about to enter into. Me, and our awesome team at Superloans, have put together a few things to consider before taking out your first loan!
Do you really need a Cash loan?
This may seem a little odd coming from a guy that represents a finance company however, it’s something we at Superloans suggest you should think twice about before applying for a loan.
Unsecured short term cash loans typically have a higher interest rate than other loan options so a pawn loan might be a good option if you have something that might be of the similar value to the amount you need.
Or wait, and save the money you need for that thing you want. Only apply for a loan when you really need it. That new game console isn’t a good reason to get an instant cash loan, especially when it’s not on sale!
Before approaching a finance company consider other places that may be able to help you - like a family member or your employer.
Work out how much you actually need to borrow?
If you’ve decided you definitely need a loan, think about how much you really need to borrow. You may think it’s best just to get the most you’re allowed to borrow. This may be a lot more than what you actually need. In the end it could mean you end up paying more in interest than you needed to, or you may find borrowing more makes the repayments difficult.
When interest is involved, the more you borrow, the more you have to pay back. You should think really hard about how much you actually need and stick to that amount.
Does it matter if I have bad credit?
The answer here is ‘sometimes’. A bad credit score can impact on your ability to get finance for a personal loan. A lender could look at a bad credit score and add extra fees and interest to the loan. Or, they may decide that based on your credit score it’s too ‘risky’ to loan you money.
The good news is not all lenders are like that, seek out a company that works through your budget and measures your ability to pay back a cash loan against your current financial circumstances, not against a potentially outdated ‘credit score’.
Who do you want to borrow from?
It’s true that there are some big differences borrowing between different finance companies and you need to be thoughtful about who you choose.
When you’re deciding on a lender find out more about them to see if they are a good fit for what you need.
Some things to think about are:
- What are their interest rates and how are they applied?
- What type of loans do they offer and how do they differ?
- How long can you borrow money for?
- What are their fees?
- What happens if you want to pay the loan off early?
- How long will it take you to get the application approved and the cash in your hand?
These are a good starting point. It’s also a great idea to look for testimonials from their customers, you can find out a lot from these.
Finance companies should welcome enquiries about their services. If you feel like you’re getting the cold shoulder when you start asking questions, then they’re probably not the right fit for you.
What happens when something goes wrong?
This is an important one, circumstances can change as soon as someone walks out the door so you should be clear about what to do if it happens to you.
If you feel like you won’t be able to make a payment at some stage, for whatever reason, the best thing to do is to let your lender know as soon as possible. Your lender may be able to help you to get through a difficult time, but they are at their most effective if they know in advance.
Good lenders will have guidelines on what to do in circumstances like missed payments and in certain situations can offer assistance. Ask them about their ‘Responsible Lending’ and ‘Hardship Assistance’ information to get an understanding about what may be able to help you if things go a bit pear shaped.
It’s not one of the times when you want to be apologising if you knew it was coming!
Know what you’re signing up for!
Before you sign anything with a finance company you should be absolutely crystal clear about fees, charges, and the interest you’re up for. There’s nothing worse than hearing a long list of ‘never discussed before’ fees after you think you’ve paid off your loan in full.
Always make sure you read your agreement in full. If you have any questions, don’t sign it until you’re satisfied with the answer. Good companies will actually offer to sit down with you and talk about the agreement in full detail, it’s a bit hard to do that if you’re doing everything online!
As a minimum you should know what the interest rate is and how it’s applied, when the payments are due, what fees are applicable to your loan, and the duration of the agreement.
How Superloans can help
My team at Superloans offer cash loans, we call them Express Loans, and Pawn Loans that can be approved in an hour or less. You can walk out with the cash in your hand so there’s no waiting for a payment to clear in your bank. Superloans have great staff in their branches that will talk you through their services and the agreements that go along with them.
If you need an instant cash loan, they’re waiting to hear from you. Apply today to get started!