Quick small cash loans can be availed on almost any corner. Lending money has always been a big business with those who control large funds providing for those dealing with a shortfall. Among their clients are individuals who need a few hundred dollars to get by or small businesses that require thousands of dollars to keep the operations going. Life deals challenges to everyone and financial hardships are fairly common. We can use any tool at our disposal to solve our problems but we have to be careful at every turn. Below are some criteria to judge whether or not quick small cash loans are appropriate:
Unexpected Expenses to Cover Emergency Fund Gap
In an ideal world, everyone would have their own emergency fund stashed for a rainy day. This protects people from unexpected expenses, job losses, abusive relationships, and every else that can lead to financial ruin. Experts recommend around 3-6 months worth of expenses in your savings account or other easily accessible forms of storage. You can certainly save more if you are so inclined. In case the fund is still not enough to cover everything, you might not have any choice but to borrow money. If friends and family are also short on cash, then lenders are your next option.
Certainty of Repayment Source within a Short Period
Only borrow money from institutional lenders if you are sure that you can repay everything within a short period. Quick small cash loans tend to be attached to incredibly high interest rates. This is the price you pay for the speed at which you can access the loans. They are unlikely to conduct background checks or credit checks. They will simply ask for proof of income which is easy to provide. If you don’t have a reliable cash flow coming in, then look for other funding sources.
Important Expenses that Prevent Greater Loss
Loans with high interest should be avoided as much as possible. However, sometimes they can still make financial sense if you are avoiding an even greater loss by borrowing money. For example, a family member may be at a hospital in need of an emergency surgery to live and no insurance will cover it. Your business may be at risk of closing down if you don’t satisfy all the requirements of a client or a regulator.
Weigh your options and apply the above criteria when making a decision.