Elastic Short Term Lending
Elastic Flex Loans are offered through Republic Bank and provide a short term lending option. These loans are somewhat unique compared to other similar options. Unlike personal loans or payday loans, Elastic lines of credit are based on a fee structure (as opposed to interest rates). There are several positive aspects of this system but it does not come without cost. The Elastic Flex Line of Credit is going to be be most beneficial for consumers who can quickly repay their loan. Summary points of the service include:
- Ability to borrow $500-$4,500
- Bi-Weekly, Semi-Monthly, and Monthly repayment terms
- Carried Balance fees apply each payment without payoff
- Free access to your TransUnion Credit Score
- Funds available as quickly as the next business day
How The Elastic Credit Line Works
Elastic does not operate based on interest rates unlike many short terming lending options. Instead of being charged interest based on your credit history you are charged a cash advance fee. This fee will be based on what you choose for your repayment options. Bi-weekly and semi-monthly repayment terms will incur a 5% cash advance fee. Monthly repayment terms will incur a 10% cash advance fee. The cash advance fee is deducted from your total requested amount.
In addition to the cash advance fee, customers are then charged a fee for each payment cycle they carry a balance. This is where the service can become very expensive. If you take the entire repayment schedule to repay your debt you will incur this fee with every payment. These fees can easily add up and exceed interest rates which would be provided with a personal loan. Conversely, if you are able to pay off your balance quickly, you can actually save money compared to other options.
Elastic Credit Line vs Personal Loans
There are many factors to consider when looking for short term lending options. First, you have to consider the amount of funding you require. Many short personal loans have minimum loan requirements. For instance, SoFi Personal Loans are a very popular option but they require at least $5,000 be borrowed. This minimum is above the maximum allowed through Elastic. Other personal loan services like TD Express Loans offers loans as low as $2,000. With this said, for smaller lending amounts, options like Elastic may be a better choice.
Considering the above situations, it still may make sense to borrow with a personal loan. If you do not anticipate being able to pay off your loan quickly, the lower fee personal loan could save you money. Borrowing slightly more than you need, at a low interest rate would be smarter than repaying through Elastic if you are unable to pay early. When comparing your options to a personal loan you should determine the total amount paid based on the interest rate you will receive. Compare this to the total amount you will be paid with a service like Elastic Flexible Credit Line. For more information about personal loans, check out our Personal Loan write up.
Elastic Credit Line vs Payday Loans
Due to the fact that Elastic is designed for smaller loan amounts, another comparable service would be payday loans. This is a type of service that should be avoided at all costs. Payday loans rely on huge interest rates, massive fees, and wage garnishment. Elastic loans may be more expensive than some lower interest rate loans but compared to services like payday loans, they are a much better choice. Unlike payday loans which are almost impossible to verify payment costs, Elastic is very straightforward with their payment schedule. In this regard, you know exactly what you are getting yourself in to.
Other Options To Consider
The most obvious alternative to the short term loan offered through Elastic would be using a credit card. The problem is that credit cards typically have interest rates of about 20%. This is a very high rate and if you carry this balance for an extended period of time you will incur significant expense. Some credit cards offer lines of credit that provide different interest rates. For instance, some Citi Credit Cards offer what is known as the Citi Flex Plan. This allows customers to borrow from their credit limit at a different rate. You should contact your credit card issuer to see what options like this may be available for you.
Another option would be something like the US Bank Simple Loan. These are small dollar loans that allow for flexible repayment. The issue with these types of loans is that they can still become subject to very high interest rates. Check with your bank to see what options may be available for short term lending.
Final Thoughts – Elastic Flexible Credit Line
Overall, this can be a valuable tool for consumers in select situations. If you anticipate being able to quickly repay your debt, you will only be subject to the cash advance fee. If you plan to take the full repayment time to settle your debt then it would be wise to consider other options. The easiest way to determine the best option is to calculate your payment totals for various funding opportunities. Most loan services provide pre-approved offers available for review with no hard credit check necessary.
There are many reasons consumers may need access to short term funding. Whether it is an unexpected financial emergency or otherwise, getting funds fast is an issue all consumers face at some point. Do not be panicked in this situation. Take your time to review options and keep in mind that most services can provide funds very quickly (often within one day). Spending a couple of hours researching your best option can save you hundreds or thousands of dollars in the long run.