If you need to apply for a loan for your home, yourself or in order to consolidate debts, you probably think you want to find a company that offers easy loans.
After all, some companies require an extremely good credit rating, a high income and a certain number of years in your job. All things that can eliminate you from being able to get a loan from that lending institution.
With easy loans, however, there are negatives as well. Negatives you may not have thought about until you begin to apply.
High interest rates — One of the biggest negatives about an easy loan is usually that the company offering them charge extremely high rates.
That means, while a company that could give you a loan if you had a more stable financial background may offer it to you with an interest rate of between 4 and 10 percent, a company offering easy loans will not.
Instead, you may find yourself paying an interest rate of 25 percent or more. A huge amount, and one that will make it very difficult for you to pay off that loan in a reasonable amount of time.
Low loan amounts — If you want a loan for your home, a car or to pay off debts, you may need to be able to get $10,000, $20,000 or more.
A company offering an easy loan, however, will often cap off their loans at just $2,500. A sizeable amount, of course, but not one that will give you all the money you need for your loan.
Faster repayment times — Companies, like New Zealand’s easy loans company, able to give you an easy loan may also require you to pay it back much faster than a traditional lending institution.
That could mean, whereas a traditional company can allow you to repay that loan over two, three, five or more years, a company offering easy loans may require you to repay it within just a few months. For someone with a low income, that can be just about impossible.
Hidden fees — While a traditional lending institution is usually upfront about all the interest and fees you will need to repay, a company offering an easy loan is often not.
Once you take out that loan, you may discover there are hidden fees you had no idea about. To such an extent that repaying that loan could suddenly mean you having to repay hundreds more dollars than you expected.
Repayment penalties — With many traditional loan companies, if you decide to pay off the loan faster than the repayment term, there will not usually be any repayment penalties.
A company offering an easy loan, however, may charge you more hidden fees and higher charges simply because you had enough money to pay off the loan faster than they want you to.
This is why, before you sign up for an easy loan with any company, read all the small print and understand exactly what you are letting yourself in for.