Have you ever received a check in the mail unsolicited? It just pops into your mailbox and when you open it you may think you’ve won the lottery. Well, think again. When it comes to what is a live check, it isn’t free money. In fact, it is a loan offer. So, what happens if you cash it or deposit it in your bank account? Read on to find out…
What is a Live Check?
A live check is actually a loan.
If you decide to cash this check or deposit it in your bank account, and it can be tempting to do so, just know that you will have to pay this money back plus interest.
It is no different than going into a bank and getting a loan.
The only difference is that it comes to you in your mailbox.
Also, and this is really important when you cash or deposit this check you are agreeing to the terms of the loan.
Very often the interest rate that comes with this check/loan is high and can be as high as 25 percent APR (annual percentage rate.)
The term or length of the loan may be several years.
So, what seemed like a dream come true becomes a bit of a nightmare.
The $500 to $3,000 dollars they are offering you will end up costing you quite a bit more.
Check the fine print and it should tell you how much you will end up paying when all is said and done.
I understand that if you are in a financial pinch these unsolicited loan offers can seem like a real gift, but in the end, you are the one that will end up paying through the nose for it.
Oftentimes, these offers are sent to people with bad credit.
Online lenders can prey on people in a difficult financial situation.
They know you need the money so they send you the loan check and hope you go for it.
Do what you can to avoid cashing these check loan offers.
See what you can do to find the money you need elsewhere.
What If You Really Need the Money?
If you decide you are going to throw caution to the wind and accept check loans, then there are a few things you need to do to protect yourself.
When receiving offers via mail such as this the first thing you want to do is understand the loan terms.
This includes the repayment term, how long you will be paying on the loan.
You will want to take a close look at the cost of borrowing this money and the annual cost.
Two things of high importance are the payment schedule and payment amounts.
This is a personal loan of sorts, so make sure you understand the personal loan rates you will be paying.
Also, see if they are charging you a loan application fee.
The point is, you want to understand exactly what you are getting yourself into and how much and how long you will be paying.
How to Stop Offers
If you worry that you will be tempted to take an unsolicited check loan, then the best thing you can do is opt-out of future offers.
You may have to contact the company either by mail or phone, but do so.
It will take a little time, but in time, you will stop the offers and those loan amounts won’t tempt you any longer.
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Other Types of Live Checks
Another type of live check you may receive is a convenience check.
If you have a credit card, the credit card company may send you unsolicited checks in the mail.
They will call these convenience checks.
You can write this check and spend it any way you would like, but it will use part of your credit card balance.
Not to mention, the interest rate you pay on this money will typically be higher than what you pay when using your credit card in the normal way.
It is best to simply shred these checks when you receive them and not use them.
In the end, if you’re having financial issues, the first place you want to look to address those issues is unnecessary spending.
Do what you can to build up a small emergency fund and then these live checks won’t be as tempting.
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To Sum it All Up:
A live check is simply a loan. It will come with high-interest rates and payments for years. It is best to avoid cashing or depositing this type of check. You will end up paying far more than what they are offering you and if you are in a tough spot financially, this will only make it worse.