Cash Converters loans are a great choice if you have recently fallen on hard times. For example, being made redundant, and having only 7 days to pay your final bill when your next government support cheque is two days away. In this article we look at what cash converters financing is and how you can use it in an emergency like this.
What Are Cash Converters Loans?
Cash Converters is a combined pawnbroking and payday loans business that has become extremely popular over the past 10 years. The chain was founded in Perth, Australia in 1984 and as it's success grew it spread to other parts of Australia and later New Zealand, the UK, the USA, South Africa, France, Canada and Spain. Cash Converters is now one of the most recognizable businesses of its type in these parts of the world.
Cash Converters are a brand of same day financing that are well suited to people with a need for cash in hand quickly. The premise of this type of financing is to lend a small amount of money for a short time frame without the need for time-consuming credit checks. This means that you can get financing from Cash Converters even if you have extremely poor credit rating and a small amount of income.
How Much Can You Borrow?
The initial loan, or 'principle amount' is usually quite small for this type of financing, often less than $1000. The actual amount you can get depends on your actual income, as this is how well you can pay back the loan. Since you are not required to have a credit check the guarantee for the loan is actually your next pay cheque. So if your next pay cheque is $500 then you can probably borrow that much in one go. The actual amount can vary a lot between different types of cash advance loans, however.
What If I Don't Have a Consistent Pay Cheque?
With Cash Converters you can also guarantee the loan against a possession that you own. If you need $200, for example, then you may be able to secure that with a camera or DVD player. This is a good alternative if you don't have a steady pay cheque. However, you should be aware that if you default on the repayment then your guaranteed item will be kept by the lender. As such, it's not a good idea to put up a family heirloom that you cannot afford to lose.
What Are the Benefits of this Type of Financing?
Fast and Easy - The primary benefits of this type of financing is that they are fast and easy to obtain. You do not need a credit check and you don't even need a current income if you have something of value to put up as a guarantee. If you are stuck and need cash quickly then this is a very viable option, especially if you know you can get the money to pay the loan back within a short time frame.
What Are the Drawbacks of this Type of Financing?
High Interest Rates - The biggest drawback of Cash Converters financing (and other payday financing options) is that they have very high interest rates and fees. The most common interest rate for even a short-term loan is 30%. This is much higher than most other forms of financing. On top of this you also have a flat fee, usually somewhere around the $15 mark. As such, you must be prepared to pay off the additional amount over what you borrowed if you use this financing method.
The next drawback is that late fees are also very expensive on this type of financial product. If you are even a week late then you could be paying as much as double what you borrowed. This means that you should really only take on this sort of loan if you are 100% sure that you will be able to repay it within the specified time frame. The actual amount of time that you have to repay the loan depends on what you choose to get. Some loans are 7 day financing while others give you a month or more.
Tips for Safely Taking Out a Cash Advance Loans
Be Sure of Your Ability to Repay - As mentioned earlier you should sit down and work out whether you will be able to repay the borrowed amount in the specified time frame. If you are not sure then you should probably consider another form of financing.
Read the Terms and Conditions Carefully
This goes for any type of financing but especially payday loans. You do not want to be hit with an extra $50 fee that you didn't know about because this could leave you unable to fully repay the loan (which could see you hit by late fees as well).
Alternatives to Payday Loans
If you are unsure of whether payday loans are right for you then you might want to consider some of your alternatives. The following may be well suited to you:
Selling of Unwanted Possessions
If you have something to put up as collateral on a cash advance loan then there is a pretty good chance that you have something that you could sell as well. Cash Converters and many other places will buy your unneeded items for cash in hand. Be aware that you will likely be receiving much less than you may think the item is worth though, so only do this in an emergency. If you have more than seven days to raise the money then you could consider selling your things on a website like eBay instead.
In many places it is possible to pick up some small temporary work for a couple of days to raise some cash. Often business owners will put out a call for people to do some work for them for a day or two, especially in the agricultural industry. You could also mow lawns or do handyman work for some friends or neighbours to raise some money. These are all usually hard physical work but can be worth it, as you wont have to take out a high interest loan.
Welfare Advance Loans
If you are on welfare or a pension then you may not be aware that you can actually get an interest free loan from the government. These loans are usually a couple of weeks worth of your welfare payments in one go. You simply pay these off over time as a percentage of your regular cheque, with no added interest. This is a great option and you should definitely consider it before using something like Cash Converters loans.