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Three Myths of Small Cash Loans

While you are struggling to make ends meet, something that you could be considering is small cash loans. The problem with these types of loans is that there are a lot of myths connected to them and you may start to think of other ways of borrowing. However, it is worth checking to see which of these myths are just stories and which are true.

You Will Damage Your Credit Rating

This is one of the biggest myths going about small cash loans. Like any loan, there is the potential of damaging your rating but they can also help your rating at the same time; and this is more likely as long as you are sensible with your borrowing. The benefit is that you can prove you are able to borrow money and pay it all back at the end of the month. You will come across as a lower risk and more lenders will be willing to loan to you.

However, you do need to be careful because if you are irresponsible, this can actually backfire. The problem is that you only have 31 days to pay the full amount of the small cash loans back. If you do not pay that money back on time, you will come across as a higher risk.

The Loans Will Cost a Lot in Fees

Because of the APRs, many people believe that these loans will cost a lot of money. However, small cash loans could actually be cheaper than your overdraft charges or fees for going over your credit limit. This is something that you should check out for. It is worth looking into the fees for setting up an approved overdraft and compare them with the first month fees for the loans.

However, like with your credit rating, you do need to be sensible when it comes to borrowing money. Ti can be very easy to believe that these small rates on the small cash loans will remain but as you leave the loan, you will end up paying the high rates of interest, which will make all of your savings pointless.

You Cannot Get One with Bad Credit

There are no credit checks with small cash loans, which makes it much easier for people to get their hands on money that they need. You are almost guaranteed the amount of money that you want. However, you will need to meet a few requirements, all of which are detailed before you start applying for the loan.

The companies are more interested in your current financial situation rather than your previous situation, so you need to prove that you can pay back the small cash loans at the end of the month. That does not mean that you need to be in full time employment, or even employed at all. However, your employment status and the amount you earn each month will determine the amount that you can borrow from the small cash loans; you will also need to shop around because the requirements for each company do differ.

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