The reasons short-term loans from non-traditional lenders are so popular include easy approval, minimal qualifications, and fast cash. Bank loans require a lengthy application, take several days to get approved, and are not available to everyone. People with high debt to income ratios, those with a past history of credit problems, and even people who have not established any credit history at all are not eligible for bank loans. Their only resource is companies that offer short-term loans at higher interest rates. It does cost more money, but many begin to improve credit ratings by utilizing that option.
Most options require no collateral, no traditional credit checks, and no loan origination fees. Approval is granted in a matter of minutes, and the cash is available immediately. It can either be picked up at one of several office locations, or deposited directly into a bank account. Requirements for qualification include an open and active bank account, a debit or credit card with a Visa or MasterCard logo on it, and a social security number. Applicants must be at least eighteen years of age, be a US citizen, and provide proof of income. The income can be either a fixed income, or proof of employment with a minimum of thirty-six hours each week. A home or cell phone number that can be verified and a valid photo identification rounds out the extent of qualifications. Collateral is required if applying for a title loan.
Loan amounts range from one-hundred dollars to three-thousand dollars, depending on the type of loan the applicant selects. Personal or installment loans are typically for larger amounts because payments are spread out from six months to three years. Payday loans are for lesser amounts because they are paid back in one payment. The amount loaned is based on individual earnings and the ability to pay back the loan. It is imperative to understand all the details regarding the conditions of the loan. Failure to make payments on time will result in late fees, return item fees in the case of a title loan, and decreased chances of borrowing money again in the future. The qualifications are few, approval is easy, and the money is available fast. Be sure to consider the consequences of taking out a loan that may be difficult to repay because penalties add up quickly and can have severe financial implications.