What is a cash loan?
A cash loan is a multi-purpose loan that you, the borrower, receives in cash. Also known as a personal loan, this type of loan is unsecured and does not require any sort of collateral in stocks, fixed assets, or property. In the end, the cash loan is backed only by your assurance to repay your lending bank, cooperative, or financial institution.
How do cash loans work?
When you take out a cash loan, your lender charges interest for loaning you money. Loan repayment is done through monthly installments – paying the amount you borrowed along with interest. Depending on the terms of your cash loan, this credit period can range from 6 months up to 24 months.
Since personal loans are unsecured, the interest rates can run as high as those found in credit cards. These interest rates may be fixed or flexible, depending on your lender’s terms and assessment of your credit history. Some lenders have an increasing interest rate throughout longer payment terms.