Cash loans are a valuable way to get a small advance on your pay if you are short on money towards the end of the month. However, there are a lot of downsides to taking out cash loans. They can be incredibly expensive – with interest rates that are over 1000% AER in many cases, and they are not designed for people who need to borrow a large amount of money.
Cash loans are a good stopgap for someone who needs to repair their car or replace a broken appliance, but the fact that you have taken out a short term loan will appear on your credit rating, and this could put you in a difficult position if you need to apply for a more mainstream form of credit at a later date.
In addition, cash loans can be incredibly problematic if you find that you are suddenly unable to meed the repayments. The loans are expensive, and you would need to know for sure that you will be able to make the repayments on time, because late payment charges are often punitive. For this reason, such loans are not recommended for people who have an unstable income. They can put those people in a trap where they have to borrow more and more to make the repayments, and this makes it almost impossible for them to get back to financial stability.
If you are not sure if you would be able to make your loan repayments, you might want to borrow from a credit union instead, since these are more likely to offer fair rates of borrowing, even to people who have low incomes or poor credit histories, especially if those people save with the credit union or live in the local area.