Cash loans are small versions of larger loans. Depending on the type of loan, different forms of risk management will be used. For individuals will a high credit score, collateral, and proof of employment, they could receive a large loan with a small interest rate, and depending on the institution, a low amount of required collateral. Other, extremely short term loan services, will offer loans by the day. These payday loans are short amounts of money that are meant to get you to your payday, where you can pay the institution back. In some states these areas are outlawed because of their close resemblance to usurious lending. Usury is the intentional lending of funds at extremely high or exorbitant rates, although this is not true of all payday loan areas.
Generally the marketing for certain payday loan locations involves the understanding that you can get the cash loans on the spot with some simple paperwork. The collateral may be as simple as a job history of more than six months for those with moderate credit scores. For those with less valuable credit scores, the lending institution might require an auto title in order to properly distribute the funds. These are auto title loans but could also be combined with payday centers to incorporate a variety of methods of getting small amounts, generally less than $5000, to the borrower quickly. These micro loans are a source of great profitability in certain United States, as well as a source of third world development in underdeveloped countries who receive micro loans from private businesses. The International Monetary Fund does not delve into these micro loans, but has recognized their value and encourages the private sector to inject itself in these areas. Cash loans have different utilities dependant on the location and other discriminating factors.