About Cash Loans - Cheap Personal Loan

Cheap Personal Loan - Nothing Cheap About It

Ok, so you've found one of those Internet lenders offering a cheap personal loan. While other lenders charge you $15, even $20 per $100 you borrow in a quick personal loan, you've found a company charging $5. Great. That $500 loan will only cost $525 when it comes time to repay, granted you meet the following demands:

You repay the full amount all at once - $525 is a lot of money.
You repay on the date of your next paycheck - and if you only earn $700, even $1000 per paycheck, that $525 repayment is a huge sum to consider.

For most of us, its not the cost of the loan but the urgency of repayment that drive us to the brink of disaster. So in effect the cheap personal loan is a moot point.

Whats better than a cheap personal loan?

If we were to design our ideal payday advance, we wouldn't begin with a cheap personal loan. We'd begin with the approvals, meaning first time applicants would have to pass a credit check, or would have to go through a more rigorous screening before ever applying for an advance. Then we'd extend the repayment date for a month, maybe even two. $20 for two months per $100 you borrow would still be a cheap personal loan, and would still amount to 120% APR for the lender, making this cheap personal loan one of the most expensive financial tools in the world.

So, the problem with that cheap personal loan - with personal loans in general - is that lenders are used to raking in humungous profits well beyond the worth of their services. And the dangers of payday advances won't stop with a cheap personal loan, they'll only stop when lenders loosen the fast-cash noose and demand repayment after a longer time frame.