A cash loan is a type of unsecured personal loan, which can be used for any purpose. Unlike a personal loan that can be availed from banks, a cash loan has minimal requirements and can be disbursed in as fast as 1 to 3 business days. Do note that a personal loan usually has a higher loanable amount ceiling than a cash loan; that said, a lower loan amount means it’s easier to manage payments.

Despite these advantages, cash loans are often associated with a bad reputation. In particular, they’re seen as a liability—which is true! A cash loan, or any loan for that matter, is a financial obligation that you have to fulfill; if you don’t your credit rating will take a hit. However, there are actually a lot of situations in which getting a cash loan is a good idea. At times, it may even be the best option. Here are some examples:

You Need to Pay High-Interest Debts

Taking out a loan to pay for another loan? It may seem ridiculous, especially if you haven’t done it before, but it’s actually a practical solution. With a high-interest debt, you’ll definitely be paying way more than the amount you actually loaned. As such, if you can find a cash loan option with a lower interest rate, you can drastically lower your extra payments.

Of course, make sure that the terms of the cash loan are manageable for you. Most lenders will offer different payment schedules, so pick the one that’s better for your financial situation.

You Need to Cover Emergency Expenses

If you need to make emergency payments, such as an overdue utility bill or a hospital expense, you can take out a cash loan to cover them ASAP. You can also avail of a personal loan from a bank for this purpose, but keep in mind what was previously mentioned: a cash loan is much faster to process. The approval can take only minutes, while the disbursement can be completed within a day or two.

Aside from the above-mentioned scenarios, other emergency situations in which you can take advantage of a cash loan include:

• Car repairs
• Home repairs
• Rent payments
• School tuition
• Funeral expenses

You Have a Home Improvement Project

A home improvement project costs a lot of money; even a minor remodel can be worth tens of thousands in labor fees alone. For easier financing, you can take out a cash loan instead of getting a cash advance from your credit card or applying for a housing loan outright.

For example, if you’re buying a new big-ticket appliance, you can pay for it partially with a cash loan. The interest rate will be more forgiving compared, and you’ll also save more money due to the cash discount. The same goes for purchasing construction supplies. In fact, you might not even have a choice if you’re buying from neighborhood stores; many of them only accept cash or e-wallets as payment so your credit card won’t be of much help in this case.

You’ve Hit a Major Life Milestone

When you reach a big milestone in life, such as an anniversary, a graduation, or the like, it’s only natural to want to celebrate. Whether it be through an event or a big gift, you may want to consider paying for it fully or partially with a cash loan.

Of course, you should also be realistic when it comes to these expenses. Consider your financial situation before you go all-out; you may even want to scale down so you can pay off the loan faster.

You’re Investing in Yourself

One of the best ways to use a cash loan is to invest in yourself, with a potential for returns. For example, if you want to get promoted at work and it requires a certification for a skill, you can take out a cash loan to pay for that training. Once you get promoted and receive a pay increase, you will ultimately boost your net worth and more than make up what you borrowed.

If you have a small business, a cash loan may also help you improve your services. With a small addition to your capital, you can purchase new products or equipment that will help you expand your inventory. You can even buy software that makes it easier for you to handle your business’s finances. The bottom line here is that you can pour the proceeds of a cash loan into your business to help you boost profits.

 

It’s normal to be wary of cash loans, especially because they can throw your entire financial stability off-track if you aren’t able to manage them. That said, cash loans are incredible financial management tools if used correctly. Make sure that you’re able to handle the obligations first before you apply for a cash loan!