Faced with all the variables in an uncertain world, the only consistent factor is the lurking potential for unforeseen problems. Following a strict financial plan and making lifestyle adjustments to transform frivolous spending into a financial safety net can help reduce the impact of sudden expenses; however, even the most adept attempts at budgeting can fall short when an emergency arises. While this anticipation of the unexpected has generated a number of opportunities for those confronted with the need for extra cash, some avenues are more helpful than others.
Banks, credit unions and other traditional lenders cater to a specific sector of the public. While perfect credit histories were once an eligibility requirement for these financial institutions, the guidelines have become slightly less stringent due to the widespread negative impact of the recent recession. Still, these lenders continue to focus on clients with more substantial monetary ambitions. This leaves a sizable portion of consumers out in the cold, including:
- the more than 75 million people in America who have less than exemplary credit scores
- those whose needs can’t be put on hold for the duration of the typical approval process
- anyone needing only a small amount of money
As a result, many are forced to think outside the box encompassing most lending institutions. Those falling into these categories find themselves searching for alternative solutions in times of hardship. In their state of panic, many turn to pawn shops, vehicle title lenders and payday loans, unaware of the additional option available to them. In this largely uncharted area of the lending market lie small personal loans from Springleaf Financial, and they offer a number of advantages over their alternatives.
In the case of a pawn loan, the borrower takes a personal item of value to a pawn shop where it will be appraised. Based on this figure, an offer will be made. The customer will not be offered full value for the item because the pawn shop must leave enough of a gap between the loan amount and the item’s market value to make a profit, should the customer fail to repay the loan. After receiving the loan, the customer will be given a receipt and will have a set amount of time, usually 30 days, to pay it back in full and reclaim the pawned item; otherwise, the item becomes the property of the pawn shop.
Interest rates are typically low on pawn loans depending on the amount borrowed, but additional costs, such as ticket and storage fees, apply. Upon returning to repay the loan, customers are often charged a supplementary service fee if they happen to have misplaced their receipt. Extensions on these loans are available if needed, though this benefit comes with its own steep price. Since pawn shops do not report to credit bureaus, inability to settle the loan will not negatively impact the borrower’s credit score; however, prompt repayment will do nothing to improve it, either.
Vehicle Title Loan
With a vehicle title lawn, the borrower gives up his or her vehicle title in exchange for an amount of money determined by the value of the vehicle. The client provides the title, a key to the vehicle and personal information regarding finances and employment. Interest rates for this type of transaction are higher than those of pawn loans. While some title loan providers charge as low as 30 percent, no laws govern the amount of interest these lenders are allowed to impose. Many take advantage of this freedom, levying as much as 1,200 percent interest on their customers’ need for cash.
As is the case with pawn loans, customers are generally given 30 days to pay back a vehicle title loan in full, including all interest rates and service fees added to the borrowed amount. If the borrower is unable to meet the terms of the loan as agreed upon, extensions are available accompanied by mounting interest rates and late fees. Those in need of money instantly are drawn to this type of loan, yet they often fail to consider the ramifications. Making good on a sum so far beyond the original amount borrowed often turns out to be impossible for borrowers, particularly considering the balloon nature of this payment.
Since the vehicle is collateral in such a scenario, inability to meet the terms of the loan results in losing the vehicle. For some, this also means losing the ability to travel to work, which leads to greater financial decline. These consequences can be devastating for those already in a state of financial turmoil.
When a sudden need arises, numerous people fall back on payday loans. Also not subject to credit approval, these loans provide extra money almost instantly. This option is also attractive for those who only need a small amount of money as the maximum limit for these loans is typically $1,000. A loan application is filled out, either in-house or online, detailing the applicant’s personal data, income and bank account information.
The loan is deposited into the borrower’s bank account and expected to be reimbursed within 2 weeks. Interest rates are the overwhelming aspect of this alternative, normally falling within the 300 to 700 percent range. Additional finance charges of between $25 and $250 make their way into the mix, as well.
When the time comes to fulfill a payday loan, the borrowed amount along with its underlying interest and fees are drafted out of the borrower’s bank account. Should the funds not be there waiting, the customer will be charged additional service fees by the lender; not to mention, insufficient funds charges will be applied by the bank. In some cases, borrowers are even obligated to pay further penalties for attempting to pay off the loan early.
In essence, repaying a loan of $100 could consume an entire paycheck, taking away the ability meet other essential financial obligations. Again, these repercussions could make or break a family already having difficulty making ends meet. This places payday loans among the more harmful than helpful options available to consumers.
Fortunately for the many who find themselves with imperfect credit, facing an emergency, deficient of only a small amount of money, or all of the above, Springleaf Financial waits in the interim to provide relief with much less costly terms. In line with the previously mentioned options, these small personal loans supply cash quickly and are available to the shifting majority of the public who have blemishes on their credit reports.
Unlike title and payday loans, small dollar loans are characterized by low interest rates that start at 22 percent. Also in contrast to the other choices, these are installment loans. Rather than paying back the loan in one barely manageable lump sum, borrowers are able to make smaller, more affordable monthly payments. Customers have the advantage of stretching payments out over the course of 36 months as opposed to 1 month or less.
Catering to an array of monetary requirements, these loans are available in amounts ranging from $100 up to $5,000. Though personal loans sometimes require collateral, the risk of losing personal property is far less prominent than with pawn and title loans due to the more lengthy terms presented. Not limited by the intended purpose of the money being borrowed, clients of Springleaf Financial can use their newfound funds for anything they see fit, including:
- Emergency medical expenses
- Unexpected vehicle repairs
- Bill consolidation
- Major purchases
- Home improvements and repairs
- Seasonal sales
This “no questions asked” policy is not typically available when applying for loans through traditional lending institutions.
Potential borrowers follow a simple 3-step process beginning with filling out an online application or visiting one of the company’s branch offices in person. The applicant must provide personal and contact information and financial and employment records. Upon approval, the borrower must sign the necessary paperwork, which can also be done either physically or virtually. Funds may be acquired at a local branch office or via direct deposit.
While the option to have payments automatically withdrawn from the customer’s bank account is available, it is not required. Payments can be made by mailing a check or money order to a branch office or online via computer or mobile device. Installments may also be paid over the phone or at the customer service center of any Wal-Mart location; of course, making payments in person at a local branch office is welcomed, as well.
Credit Reporting: Aside from far lower interest rates, access to larger amounts of money, longer fulfillment terms and much more transparent billing processes than pawn shops, title lenders or payday loan companies, Springleaf Financial offers additional unique perks over others in the field. This company reports to the major credit bureaus, providing clients with a highly beneficial opportunity. As long as payments are made on time, borrowers can establish, improve or rebuild their credit through small personal loans.
Extra Assistance: While paying back a $100 loan on time may not have much of an influence on a consumer’s credit score, Springleaf Financial offers the option to borrow more than necessarily needed for the occasion at hand. Perhaps the client needs $1,500 to cover vehicle repairs; he may be allowed to borrow $4,000. He can easily use the required amount for parts and labor, immediately allotting the remaining $2,500 to loan repayment. He receives recognition on his credit report and is not penalized for paying more than the minimum monthly installment.
Supplemental Knowledge: The Springleaf Financial website also contains links to various informative articles pertaining to the world of credit and educational brochures from the Personal Loans 101 program, which is designed to promote better understanding of how loans operate. Helpful tips and explanations are provided to guide potential borrowers through the loan process, from making the decision to apply to reaping the rewards of making payments on time.
Other Important Points
- Although small dollar loans are available at 22 percent interest, past credit history as well as the amount of the loan can drive rates higher.
- In some situations, such as lack of credit, extremely low income and excessive preexisting debt, the applicant may need a cosigner in order to qualify.
- Making payments in a timely and consistent manner is vital to creating and maintaining a sound credit rating and ensuring eligibility for future loans and purchases.
- If unable to make a payment on time due to extenuating circumstances, inform the lender of the situation. These institutions understand the lack of predictability everyone faces, and they are willing to work around it.
- As is the case with all loans, it is important to give this option due consideration. Take into account income versus typical expenditures.
- Bear in mind, budgeting an additional amount for savings or extra expenses can help prevent future needs for emergency funds and thwart any would-be struggles caused by keeping up with monthly loan payments.
When the immediate need for cash to cover unexpected expenses or take advantage of time sensitive opportunities arises, small personal loans are low interest alternatives payable over a period of months instead of days or weeks. This type of solution allows consumers to more easily make ends meet without creating more extensive financial problems down the road or being forced to rely on credit cards; at the same time, those who have been met with adversity in the past are able to rebuild their credit and improve their financial outlook for the future.
Having been in the industry for almost a century, Springleaf Financial has firsthand knowledge of the challenges life presents. Rather than turn away customers in their times of need or take advantage of the severity of their circumstances in order to make an extensive profit, the company strives to arm clients with knowledge and provide assistance that is constructive in both the short-term and long-term. Their services predate many of the other options on the market, proving they will likely outlast them as well.
Case of a Personal Loan user: John
I needed to borrow $679.00 for an Amtrak USA Rail Pass, it included 12 segements in 30 days. I investigated this trip thoroughly and decided that a rail pass was the best choice, and that I would save quite a bit, I certainly did. But paying the total amount up front plus some incidentals required $850.00 cash. I chose Springleaf Financial because it best suited my needs, customer confidentiality, reasonable interest rate, plus a fair amount of time to pay the money back. I also looked forward to my credit boost because I new I would be immediately paying back $1,850.00. Which I did, and I was so appreciative that I paid no interest on the $1,850.00 portion , but yielded a positive effect on my credit score from it. I am now 2 months shy of paying off my $850.00. Both my incredible travel experience and my personal loan from Springleaf Financial have saved me money and proven to be a wise choice.
Case of a Personal Loan user: Steve
You can get money fast the right way or you can get money fast the wrong way, according to Steve, a personal loan customer. It doesn’t matter if you own a house or live in a crowded apartment, if you drive a fancy sports car or take the bus, everyone can understand the benefits of getting the required money fast, according to Steve. “If your concerns are to limit your gourmet lunches or to figure out how you’re going to stretch each gallon of gas or even how you’re going to pay for your next bus pass, it pays to get money fast and right”, stated Steve. Without any doubt it’s best to go with a proven company, personal information confidentiality was important to Steve. Springleaf Financial began back in 1920, and Steve was very comfortable once he began the personal loan process with Springleaf Financial.
Steve recently got a $2700.00 personal loan from Springleaf Financial, and upon receipt of the money he did sent back $1950.00 immediately. He had a 22% interest rate on a personal loan totaling $750.00. He then made payments in the amount of $125.00 per month. The immediate money was used to put gas in his car in order to get to work and to provide money for lunch money each day without any use of a credit card. Gas is not the correct word because he bought a little diesel VW, something to think about when you want to save money, 44 mpg on the freeway. $20.00 in that car lasts for 5 days of going to and from work. His lunch averages $8.00 per day equaling $40.00 per week. Eliminating as much as possible on luxuries and focusing on necessities only Steve was able to stretch the $750.00. $240 to $250.00 per month are his very basic expenses that afford him the ability to hold on to his paying job. Meeting the jobs requirements absent of the lunch and fuel stresses, made the whole work efforts easier. Not having to worry if the car had diesel in it, not having to worry that he’ll be late if he is forced to take the bus, and knowing that he can work without being hungry, all resulted in less job stress. Meeting the $125.00 per month payment schedule to Springleaf Financial appeared comfortable.
Case of a Personal Loan user: Kerry
Kerry needed several hundred dollars for supplies and books at the beginning of this semester. She understood the immense value in choosing a personal loan over a payday loan. Kerry works part-time at a restaurant near her university and decided that the most she feels comfortable paying each month is $125.00. She decided on a personal loan from Springleaf Financial. She borrowed $2700.00 and immediately mailed back $1950.00 so she could be responsible for and make payments on $750.00 only. She actually needed $680.00 for all her supplies and books, but realized the benefits she would have if Springleaf Financial was utilized for a personal loan, positive effect on her credit, lower interest rate then any payday loan company and additional time to pay back the $750.00.