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Unsecured Cash Loans

By Edited Jun 25, 2014 0 0

Can we get one thing straight right off the bat? Unsecured cash loans are not the same as other sorts of unsecured loans because these types of cash loans are essentially payday loans and with payday loans you never have to provide the lender with any collateral so they don't necessarily have to be considered as unsecured cash loans. My clients and other industry people continue to badger me about the difference between a cash loan and an unsecured personal loan and I persist by telling them that the two are entirely different loan products, and that when you think of unsecured cash loans you might be thinking of an unsecured personal loan and not even know it.

Whenever you see the term "cash" within the title of a loan product then you can safely bet that it is a payday loan product, and this holds true whether the loan is called unsecured, secured, or otherwise. People continue to ask me about unsecured cash loans and whether they are payday loans and I explain to them that they most certainly are. There are a thousand and one names for payday loans nowadays, and these can range from unsecured cash loans, to fast cash loans, to fast unsecured cash loans. All of these are names for payday loans and virtually any name for a payday or cash loan has no effect on the actual loan product because the vast majority of payday loans do not differ from one another that much at all.

A difference can be found if you want to compare a payday loan to a personal loan though, and this is where I think many people get confused. A payday loan is short-term loan product that is made for relatively low denominations and with very high interest rates and finance charges. A payday loan is not made by conventional lenders such as banks and credit unions, and are instead made by private lenders who specialize in providing these sorts of loans. Payday loans are designed to give people the money they need right before their next paycheck and when they're facing serious and very difficult circumstances. They should not be used for new cars, televisions, and other kinds of luxury items, and they should rather only be used to make that rent payment or to buy the food and other necessities that may be required to get by that week before the next paycheck comes in.

Personal loans are much different from payday loans in that they can made for much higher denominations and much longer loan terms. They do not have to carry such high and exorbitant interest rates and fees as payday loans, and they do not have to only be used for emergency situations and other kinds of urgent situations. Personal loans are made by conventional lenders such as banks, and they are often used by people for all sorts of reasons—from buying home goods, to taking a vacation, all the way to buying sports tickets. Personal loans do not carry the same level of finance charges as payday loans and they can be paid off over years instead of months. Personal loans are more difficult to get approved for when compared with payday loans, so it is essential that you go over your credit and income before you go and apply for these types of loans. In the end you need to be able to differentiate between an unsecured cash loan and an unsecured personal loan because you don't want to get lured into applying for the wrong loan product. Do your homework on both the lender and the kind of loan you are applying for and in the end you will ultimately come out with exactly the kind of financing you wanted to begin with.

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