Sometimes, people come up short on cash for essential expenses, like gas, groceries, and utilities. Fortunately, there are plenty of loan options that can help them these expenses until they fill that cash shortfall. This article will dive into five types of loans useful for covering essential expenses. Borrowers may be able to use these to pay their bills and meet other financial needs on time.
1. Cash advances
Cash advances let borrowers get funds fast to cover essential expenses before their next payday. Borrowers can typically receive a few hundred dollars and pay these loans back plus interest when they get their next paycheck, in two to four weeks.
Cash advances can be great for borrowers with poor or no credit since many lenders have less strict credit score requirements. They’ll consider additional factors like income and employment history when making an approval decision.
If the borrower can’t pay back the loan when it’s due, they may be able to refinance in order to have more time to repay.
2. Installment loans
Installment loans are secured or unsecured loans borrowers pay back in fixed monthly payments of principal and interest. Many installment lenders check credit, but some also look at income and employment history to expand borrowing options for borrowers with poor credit. Fixed monthly payments make these loans predictable, so borrowers can cover their essential expenses while easily budgeting for repayment.
3. Lines of credit
Lines of credit are flexible loans that can be secured or unsecured. Borrowers can draw from the line of credit at will, then repay that borrowed amount plus interest at their leisure. They’ll only pay interest on the amount they borrow. These loans can be a great way to cover essential expenses that are less predictable, like utility payments and home repair bills.
4. Title loans
Borrowers who own their vehicles outright can get title loans using their car title as collateral. Title lenders estimate the car’s value, then offer the borrower a loan worth 25 to 50% of the car’s value. The borrower can get the funds that same day upon approval, making these a great option for covering essential expenses quickly. Plus, borrowers can continue driving their vehicles as they repay title loans.
5. Pawn shop loans
Pawn shop loans let borrowers use almost any valuable item as collateral for a loan from a pawnbroker. The pawnbroker runs no credit checks. Instead, they simply appraise the borrower’s item, then offer a loan amount and term. If a borrower accepts, they leave the item with the pawnbroker and walk out that same day.
Many pawnbrokers require the borrower to repay principal and interest in 30 days, although some may grant extensions. Borrowers that fail to repay will lose their items to the pawn shop, but won’t have to deal with credit damage or collections.
Consider these loans for help with essential expenses
When people are short on cash, they can fall back on several loan options to pay the bills. Cash advances, installment loans, lines of credit, title loans, and pawn shop loans can help borrowers with any credit score that need cash quickly.
Regardless of which option a borrower chooses, they should weigh their financial situation and make sure they will be able to repay the loan they choose. This will minimize financial strain while helping them cover their bills.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
About Advance America
Founded in 1997, Advance America, the country’s leading state-licensed consumer lender, seeks to help every customer achieve their version of financial stability through a variety of innovative, regulated and transparent small-dollar credit options