Most times, you may need urgent access to cash. Here, you consider different loan options. One of the best options to consider when you need quick cash is getting a courtesy loan. This loan gives you the access you need to quick cash to cover unforeseen financial expenses. A courtesy loan is a type of short-term loan that includes payday and title loans.
These loans can be acquired easily, even by borrowers with bad credit. Unfortunately, the courtesy loan is a type of loan that renders loans with a high price. This loan comes in handy when there are unexpected or unforeseen financial needs that require quick cash. To know more about this loan and how you can use it, read through this write-up to understand everything about a courtesy loan.
Types of Courtesy Loans
There are two basic types of courtesy loans: payday loans and title loans. Below is an explanation of how these loan types work.
Payday loans
These are small-dollar loans with high costs designed to render financial support to borrowers in need of quick cash until their payday. Payday lenders don’t usually run credit checks on borrowers. They are commonly known to lend out amounts of a few hundred dollars.
Title loans
A title loan is also called a car title loan. It is a type of loan that requires you to use your truck, car, motorcycle, or other vehicle as collateral. Most title lenders do not go through your credit before approving a loan. Until you pay back the loan along with any other fees added to it, you cannot get your vehicle back.
Advantages or Courtesy Loans
There are different advantages to getting a courtesy loan. These advantages are:
- Fast processing time.
- Everyone is eligible.
- Improved credit score.
- Unlikely credit checks.
Getting a loan from a courtesy loan lender opens you up to all these benefits.
Disadvantages of Courtesy Loans
Some of the disadvantages of courtesy loans are:
- Unnecessary loans.
- High interest rates.
These may make repaying the loan quite difficult.
Courtesy Loan Alternatives
If you do not want to get a payday loan, you can choose from other loan options. If you have bad credit or no credit at all, below are some of the alternatives for courtesy loans you can consider.
Unsecured personal loan:
You may be eligible for a personal loan that doesn’t require collateral from a bank, credit union, or online lender. Ensure that you have a good credit history and credit score to qualify for the best terms and a low APR.
Cosigned Loan:
This type of loan allows borrowers with bad credit or no credit at all to borrow money with a creditworthy cosigner. A cosigner is a creditworthy relative or friend who is willing to cosign a loan with you to give you a better chance at approval for a loan. However, ensure that you are aware that you put the credit of your cosigner at risk when you fall behind on payments on the loan.
Loan from friends or family:
You can decide to take a loan from your friends or family members to cover your financial needs. To avoid compromise, sign a written agreement and keep to your promises. The written agreement should contain all the conditions and information about the loan as well as penalties if the borrower defaults on repayments.
Credit cash advance:
If you own a credit card, you may be eligible to borrow a certain amount of money as a credit card cash advance. When selecting among credit cards, look out for a credit card with the lowest APR for cash advances.
Should I get a Courtesy Loan?
Before considering a courtesy loan, you need to be aware of how soon you will be required to repay the loan. You will also need to consider how much a borrower needs to pay for a loan. Payday loans and title loans generally charge a higher APRS than other loans, such as personal and credit card loans.
Courtesy loan lenders do not report payments to the credit bureaus. This has a positive impact on your credit score. But if you are falling behind on your loan payments, this lender may inform credit bureaus, and this may harm your credit score.