Many people associate cash loans with very high interest rates and numerous additional fees. What it looks like in reality and whether cash loan is actually expensive debt to be avoided.
The most important thing is to determine what constitutes the cost of the cash loan.
These are, of course, interest that we must pay back along with the entire amount we borrow. In addition, the actual annual interest rate includes all commissions and fees for granting the loan, as well as additional services, e.g. loan insurance.
All these factors affect the amount of the monthly installment that we will spend on paying off the debt. We must also remember that the longer the loan period – the greater the amount of interest we will have to pay, even if the apparent commitment will amount to us less than a short-term repayment. If we are thinking about whether a cash loan is more expensive than other loans, then the interest rate on such a liability is higher. However, we must realize that we largely pay for a service that is very convenient for the customer and besides the fact that the entire amount of money borrowed can be used for any purpose, the credit granting process itself is extremely minimized and does not require a lot of time. Thanks to this, we can enjoy additional funds very quickly without having to prepare the necessary documents, and the bank is responsible for all formalities related to thorough checking, e.g. customer creditworthiness.
It is also worth citing the fact that many institutions offer online cash loans, which means that their products are not only available to customers without leaving home, but also cheaper due to the very frequent omission of commission costs. Among the loans, we can also find promotional products that are without a margin on the condition that you buy a policy or set up a personal account.
If we are looking for interesting solutions and cheaper loans, it is worth comparing the offers that provide such facilities.
In the case of credit insurance, they are becoming increasingly popular and many banks encourage to take advantage of the opportunities offered by such a service. For the lender, additional collateral is a factor that can positively affect the borrower’s creditworthiness. In case of financial problems, the debt can be repaid, at least partly by the insurer. Of course, credit insurance is not always required on the market and if the cost of such an additional service exceeds our capabilities, we should look for cheaper products.
Attractive alternative – cash loan
Cash loans are more expensive than other banking services, but it is worth mentioning that they are a much more attractive alternative to para-bank loans. Not only because of the lower interest rate on the amount we borrow but also commission and other fees related to the fact of granting a loan or credit.