Need Quick Cash? Here are 5 Things to Consider Before Getting a Cash Loan

   

Consider these when getting a cash loan

It’s the time of the month again to say “hello” to your bills. Tuition fees are waving and insurance payments are waiting. And who could’ve prepared anyone for health emergencies? Whether it’s a big purchase that you’ve been longing for, or a necessity like paying the rent, there may come a time when a cash loan is your best option.

 

There are various ways of availing cash loans – through family or peers, banks, financing companies, or even pawn shops’ lending services. Whatever option you’re going for, here are 5 things you should consider before taking a loan:

 

1.   Where to Get the Loan

Depending on your relationship with your family or friends, borrowing money from them might be the quickest option with less to no interest at all. However, with the evident inflation, not everyone has the capacity to lend money, more so if you’re needing a huge one. Bank is one of the traditional institutions offering loans. If you have good credit status, you can get approved easily and get the money that you need after processing the requirements. It is more suited when you need a larger amount of funds, say, for buying a house or car, or for starting a business.

 

But what if your financial standing isn’t impressive? Well, reputable pawn shops like M Lhuillier are something you can look at. As long as you have valuable items (eg. jewelry, mobile phones, appliances, watches, motorcycles etc) that you can use as collateral, you’ll be able to avail their Quick Cash Loan service widely available from any of 3,000+ branches nationwide. The loan amount will depend on the appraised value of your item. With M Lhuillier, you are guaranteed to have the highest appraisal so you still get the value you deserve. They are also offering Car Loan (original OR/CR as collateral) and Home Loan (TCT or CCT as collateral) if a higher amount of funds is needed.

 

2.   How Much Money You Need

The idea of having instant money to finance your needs may excite you. But remember, you will be paying the principal amount plus the interest after a certain period of time. The higher the amount borrowed, the higher the interest. It is best to carefully determine the amount needed and how you’re going to spend them so you can come up with an amount that you can commit to. In this way, you don’t end up getting overwhelmed and risk incurring penalties when you cannot pay back.

 

3.   What is the Interest Rate

Interest Rate is a major consideration in cash loans. It is the amount charged to you for borrowing money. The lower, the better. Government institutions can provide the lowest interest rate at 10% per annum. Banks usually have an effective interest rate of 24% to 40%. Among pawn shops, M Lhuillier offers high appraisal rates and low interest rates with a fast, easy, and reliable system to meet the needs of the Filipino family.

 

4.   How to Pay the Loan

Knowing the payment terms and schedule is as important as the other factors mentioned above. This describes how and when you’re going to repay the loan. Lending institutions can either offer a fixed rate until the loan is paid off, or a varying one which is dependent on the current interest rates. Longer loan term means lower monthly payment but higher total interest costs. This means a greater chunk of your periodic payment goes to the interest instead of the principal. The key here is to know your capacity to pay and determine the optimum amount that you can set aside for paying the loan.

 

5.   What are the Process and Requirements

Banks impose stricter requirements before approving a loan. You need to have an account in the bank where you plan to loan. They will also ask you for some documents (eg. pay slip, certificate of employment, ITR, etc) and do a check on your credit standing to ensure that you will be able to fulfill your obligation. All these processes may take days or weeks before your loan gets approved.

 

On the other hand, loans through pawn shops are suitable for emergency situations. You will only need two items: [1] your valid ID, and [2] your collateral item. Hand your item to the branch personnel for appraisal and you will get your cash within the day. M Lhuillier offers safe and secure transactions by ensuring collateral items are stored in a “safe within a vault”.  All branches are equipped with CCTV, fire alarms, and monitored security systems.

 

When getting a cash loan, make sure you compare and familiarize yourself with the 5 factors mentioned above. This will help you determine the best option based on how much money you need, when you need it, and how you’re going to repay. I still highly recommend establishing your emergency fund no matter how little you put in. In time, this will help you address the urgent need for cash without the need to loan. Lastly, practice financial discipline so you can spend your money wisely and maintain a good credit standing.