There are moments in life where you might get in a financial emergency and need quick access to cash. Going through the traditional bank and applying for a loan might not be fast enough. You might have a medical emergency or a car repair that just simply cannot wait. One option that might be available to you is a Courtesy Loan. These loans are typically very quick and helpful for borrowers with not very stellar credit.
In this article, we’ll go over what exactly occurred in ceiling is, and the pros and cons of taking one out.
A Courtesy Loan is a short-term loan that is typically funded very quickly and requires very little documentation of income and credit. Courtesy Loans are designed to be fast and easy. Once applied, a Courtesy Loan can be funded on the same day.
But when considering taking out a Courtesy Loan, they are typically two types. Payday loans and title loans. Let’s go over both in more detail.
Payday loans are designed to give you financial support until your next paycheck comes. These loans are typically a few hundred dollars up to $1,000. Some states offer payday loans higher than $1,000. Payday lenders typically charge $10 to $30 for every $100 borrowed. This makes payday loans very expensive compared to traditional loans averaging out to well over 300-400% APR.
Payday lenders usually don’t run credit checks. They typically just need to see that you are employed and history of pay stubs. You would only typically take out a payday loan in a very dire situation. If it can wait, Then don’t take out a payday loan. You will save yourself a lot of money on interest alone.
Unlike payday loans, title loans are secured by an asset. Typically, you use your truck, motorcycle, or other vehicle titles as collateral. Similar to Payday Loans, they usually don’t check your credit. Instead, the answer to that you are secure in your loan against is the collateral in case you don’t pay it back.
Title lenders typically charge an average monthly interest of 25%, averaging out to about 300% APR. These types of loans are also very expensive. You also risk losing your vehicle if you don’t manage to pay it back, Making it also very risky. Again, this is only an option if your situation is extremely dire and in need of cash ASAP.
Although Courtesy Loans have a reputation for taking advantage of people in desperate need, they are some advantages that come with them. If you were extremely responsible and careful, there are some advantages to these loans.
On the other hand, Courtesy Loans do also have their disadvantages. If taken for granted or done irresponsibly, Courtesy Loans can be very damaging. Here are some disadvantages.
Courtesy Loans can seem very appealing, especially during desperate times. Although if used responsibly, they can also be extremely damaging and put you in a worse situation. It’s always important to figure out your alternatives before you take this route.
Considered traditional personal loans, borrowing from friends and family, or using credit cards when in a financial Jam. If you have absolutely no other Alternatives, then you might consider getting a Courtesy Loan. Always keep the advantages and disadvantages listed above before doing so.
Good luck!
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