A lot of us end up spending a chunk of our income by the middle of the month. Pushing yourself towards the end of the month with barely any money to spend, is a real struggle. If you too are jostling to cover your rent or keeping up with the bills, a quick loan might come in handy. Quick loans are designed to cater to urgent financial needs. Emergencies are always unforeseen and you may not always have cash at hand. Moreover, your friends or family may not be readily available to help you out. In such a case, a quick loan enables you to get faster access to money.
In this article, we’ll learn more about what quick loans are and things you should consider before borrowing one.
What makes a quick loan different?
Quick loans are not a financial product out of the blue. They’re fundamentally personal loans that make funds available for the borrower in a shorter span. You can avail of a quick loan through several platforms – online or through a credit union, per se.
Since it falls under the personal loan umbrella, a quick loan is a form of unsecured credit. So, you won’t have to declare an asset as collateral to secure a quick loan.
The distinguishing factor of quick loans is that the funds are available to you moments after your loan gets approved. For instance, a title loan or a simple cash loan lender will transfer the proceeds to your bank account, right after your loan’s approval.
What types of quick loans can I avail?
Quick loans encompass a wide variety of credit. We’ve enlisted some of them below:
- Instalment loans: Financial institutions such as banks or credit unions offer unsecured personal loans that are transferred to your bank account within a matter of hours. Now, you can repay the money in monthly instalments over the term of your loan.
- Lines of credit: You can avail of a line of credit from a bank or a credit union. A line of credit is a pre-determined amount of money that a lender agrees to lend you. You will need to pay interest only when you utilize this facility.
- Online lenders: Online lenders are known to have quicker approval times. Borrowing from an online lender is a pretty straightforward process. Just like any other form of personal credit, the lender evaluates your application to determine your creditworthiness. This helps them in setting up an appropriate interest rate for you. If your loan gets approved after a credit check, the lender might just send the money right into your bank account. You might even get access to the money on the same day. All you need to do then is to repay the loan in full and on time.
- Title Loans: A car title loan is a popular form of short-term credit. This is a secured loan wherein you secure your vehicle as collateral against the loan. The lender would normally withhold the registration documents of your vehicle until the loan is repaid in full and on time. In case of a default, the lender can seize and repossess your vehicle as per the loan agreement. The term of the title loan usually lasts for 15-30 days.
- Pawn-shop loans: Pawnshop loans are secured against an asset. The lender will evaluate your asset’s value and use it as leverage. For instance, you can use some jewelry or an antique item as collateral to get a pawn shop loan. Pawnshop loans usually come at a high rate of interest. To reclaim the pawned item, you must repay the entire loan amount along with interest.
Here’s what you can use a quick loan for
A short-term quick loan can solve a variety of purposes, which include, but aren’t limited to, the following:
- Unexpected bills – medical emergencies, accidental damage
- Vehicle breakdown or repairs
- Home improvement or servicing – plumbing, heating issues
- Funeral costs
- Other unforeseen expenses
Things to consider before borrowing a quick loan
A quick loan may help you tide over a cash crunch. But there are certain implications to keep in mind before resorting to this form of high-cost short-term credit. Following is a list of things to ponder upon, before borrowing a quick loan:
- Quick loans aren’t always ‘quick’: The lender may take a few days to process your application. So it might take a while for them to transfer the funds to your bank account.
- The interest rates may be sky-high: Quick loans are personal loans used as instant or quick cash advances. Since these are high-cost short-term loans, the APR can sometimes go beyond 400%. So weigh the pros and cons before opting for one.
- You may only be able to borrow a small amount: This type of loan only covers small and urgent expenses. Taking out a quick loan doesn’t make sense if you’re planning a big-ticket expense.
- The loan term may be short: Quick loans are short term loans, so you might have to repay the loan within a week or two, a month at max. Thus, quick loans might not give you enough time to accumulate the amount of money payable to the lender.
- Some lenders may not lend in your state: Lenders often avoid setting up a business in states with strict regulations. So, there’s a fair chance that this facility may not be available in your state.
Regardless of the form of credit you choose, consider the overall cost of the loan. You must stick to your repayment dates to avoid putting yourself in jeopardy. If you have a pattern of borrowing loans one after the other, then you may end up in a debt trap. Accumulating debt can be detrimental. Consider sharing your problems with a financial advisor.
Let 786 Loans help you with your quick loan
- Fill our online application form
- Choose a loan amount and loan term
- Submit the form
If the lender approves your application, the loan amount will soon be disbursed to your bank account.