Posted by A lot of people exhaust a chunk of their income by the middle of the month. Trying to drag ourselves to the end of the month becomes 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. A quick loan, as the name suggests, could give you fast access to money. After all, a little help here and there never hurt anybody!
In this article, we’ll learn about what quick loans are and things you should consider before borrowing one.
What is a quick loan?
Quick loans are basically quick personal loans that provide you with the required funding in a short span of time. Such loans are available through a number of platforms – online or through a credit union, per se.
Just like any other personal loan, quick loans are an unsecured form of credit. You will not be required to secure an asset, such as your property or car, to get approved for a quick loan.
Certain personal loan lenders offer swift bank transfers once your loan is approved. For instance, a title loan or a simple cash loan lender will transfer the proceeds to your bank account as soon as your loan gets approved. This is why such loans fall under the category of quick loans.
Types of Quick Loans
The following are some of the most common forms of quick credit:
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Quick Personal Loans:
Financial institutions such as banks and credit unions offer unsecured personal loans that are transferred to your bank account within a matter of hours. An installment loan is a good example – you repay in monthly installments over the term of your loan.
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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 financial institution has agreed to lend you. You will need to pay interest only when you utilize this facility.
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Online lenders:
Online lenders are known to have fast approval times. Borrowing from an online lender is a pretty quick and straightforward process. Just like any other form of personal credit, the lender assesses your application to determine your creditworthiness. They do this to determine a suitable 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’ll have access to the funding perhaps within a few days. All you need to do then is to repay the loan in full and on time.
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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. Should you default, the lender can legally repossess your vehicle as per the loan agreement. A title loan usually lasts for 15-30 days.
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Pawn-shop loans:
A loan from a pawn shop is secured against an asset. The lender will evaluate the value of the asset and use it as leverage to back the loan. 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 loan in full and on time.
What can a quick loan cover?
A short-term quick loan can solve a list of purposes, which include, but aren’t limited to:
- Unexpected bills – medical bills
- Vehicle breakdown or repairs
- Home improvement or repairs – plumbing, heating issues
- Funeral costs
- Unforeseen expenses
6 things to remember while borrowing a quick loan
A quick loan may help you during a cash crunch. But there are certain things to consider before resorting to this form of high-cost short-term credit. Following is a list of things to contemplate upon, before borrowing a quick loan:
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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.
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The interest rates can 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 your options wisely.
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The loan amounts are small:
This type of loan only covers small and urgent expenses. Taking out a quick loan doesn’t make sense if you’re planning on a home remodeling project.
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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 tops. Thus, quick loans might not give you enough time to accumulate the loan amount and repay it.
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Quick loans may be available to those with bad credit:
Several quick loan lenders don’t pay much heed to your credit score. Thus, it’s easy for someone with a below-average credit score to avail of a quick loan.
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Some lenders may not lend in your state:
Lenders often avoid setting up a business in states with stringent regulations. Thus, a quick loan may not always be available in your state.
Whatever may be the form of credit you utilize, you need to make sure that you’re well aware of the cost that you will be born. You must stick to your repayment dates in order 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.
Apply for a quick loan with 786 Loans
- 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 be disbursed to your bank account.
