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5,000 Cash Loan

It is fairly easy to get a cash loan or cash advance for an amount such as $5,000. The problem is that such a cash loan often comes with high interest rates and excessive fees.

A cash loan or cash advance is a short term loan with high interest rates. Such loans are often called hard money loans because they are direct advances of money that a borrower is expected to pay back very quickly.

These loans are called cash loans because in the past, lenders gave cash directly to businesses and individuals that needed it. Today, most cash loans take the form of electronic deposits of money directly into a borrower’s bank accounts.

Getting a $5,000 Cash Loan

The store front cash lenders found in most cities usually won’t make cash loans in amounts a large as $5,000. To get a $5,000 cash loan most borrowers will have to turn to the hard money lenders that advertise online.

Most hard money lenders will make a $5,000 cash loan and advance the money quickly to those who qualify. To qualify for a $5,000 cash loan you will probably have to verify that you have the income to pay it back. This means that the lender will probably want to see documentation verifying the income such as a bank statement.

Hard money and cash advance lenders can be located fairly quickly by going online. A loan can usually be arranged within a few hours.

Drawbacks to a $5,000 Cash Loan

There are some serious drawbacks to a $5,000 cash loan. The biggest is the high interest charged by hard money lenders. Borrowers, especially those with bad credit; will have to pay interest rates of 20% or more.

Cash loans also come with a short turn around time. The loan usually has to be paid back fairly quickly or interest will accrue.

Some cash loan lenders will require the borrower to submit to an automatic payment plan. Under the plan the lender has the right to withdraw payments or repayment from the borrower’s bank account on specific dates.

The biggest drawback to a $5,000 cash loan is that paying it off will tie up a large portion of your income for the foreseeable future. Those who don’t have the money to spare should not take out such a loan.

Alternatives to $5,000 Cash Loans

Individuals and businesses should look into alternatives before getting a $5,000 cash loan. There are several cheaper credit alternatives to cash loans available.

Real estate or home equity loans and lines of credit are secured by equity in a piece of property. These credit arrangements come with much lower interest rates. Another advantage to equity loans and lines of credit is that they don’t have to be paid off for several years.

Credit cards and bank lines of credit have high interest rates but they have the advantage of being lines of credit. This means that the borrower decides how much to pay and when to pay. 

Private equity lenders will lend money to businesses that are willing to put up business equipment or a stake in the business as collateral. Some private equity lenders and factors will also loan money on accounts receivable. Private equity loans usually have much lower interest rates and longer payback periods than cash loans.