Whenever financial emergencies occur, most of us rely on loans. Just a handful of people are prepared for unexpected expenses. Sad, but true.
Fortunately, loans nowadays are no longer as stringent as before – whether you’re taking it out of the bank or availing of the offered loans by Credit Ninja and other online lenders. Hence, everyone can access them, as long as there’s proof of income and good credit score – or even a less desirable one.
If you need to get an immediate fund or you’re running out of options to get fast cash, quick loans might be the solution you are looking for.
How Do Quick Loans Work?
Quick loans can grant you fast money and are usually repayable in the short-term. Sometimes, you can even get a quick loan even if you don’t have a bank account. This type of loan is perfect for your immediate expenses such as car repairs, medical bills, and other such unexpected bills. Furthermore, quick loans tend to come with an easy application and approval process.
Banks, credit unions, and online lenders can help you take out a quick loan. You will need to apply for the loan by visiting the lender’s office or do so online. The lender will then evaluate your application, which includes the assessment of your financial history. Once approved, you will receive the funds you need typically within 24 hours, depending on the lender.
You can choose to repay each month via installments or make a single payment, depending on the lender. If you choose to pay the loan through installments, this means you opt to repay each month till you pay off the loan.
On the other hand, choosing a single payment means repaying your loan in full on a set date with a lump sum of money. To know more about single payment, you can read more on it.
Advantages of Taking Out a Quick Loan
The following are the advantages a quick loan can offer:
- Fast Disbursal: Most of the time, you can get a quick loan approval within a few hours and receive the funds on the same day.
- No Credit Check: Lenders typically don’t run a credit check when evaluating your application for taking out a quick loan.
- No Collateral Required: Some quick loans don’t require you to pledge collateral in order for you to qualify.
- Easy Application Online: Most lenders offer an online application process when applying for a quick loan, which makes it even easier.
- Zero Physical Documentation: Most of the time, a lender requires minimal physical documentation when it comes to quick loans since you usually apply for it online.
Disadvantages of Taking Out a Quick Loan
Below are the disadvantages a quick loan can have:
- Higher Interest Rates: Since the process of taking out a quick loan is less rigorous, this convenience comes at a cost, including higher interest rates compared to loans that are repaid long-term.
- Costly Fees: Most of the time, a quick loan carries origination fees and penalties for late payments.
Types of Quick Loans
The following are the types of quick loans you should know about:
A payday loan can get you money fast. Moreover, this type of loan is most likely due on your next payday. Hence, if you have unexpected expenses that need to be paid immediately, taking out a payday loan can help.
In the US, most states have laws that limit the loan amount you can get through a payday loan. Besides that, these laws also set the maximum interest rates and fees a lender can charge a borrower. Moreover, some states prohibit this type of loan. Hence, it would be best to research if your state even allows payday loans if you plan to get one.
Payday loans most likely offer small loan amounts. On a two-week term, a lender can typically offer you a loan of $350. However, it can also range from $50 to $1,000.
Car Title Loans
A car title loan is a secured type of loan; it uses your vehicle as collateral. This means your car’s registration or title will stay with the lender until your loan is fully paid. If you fail to repay the loan, the lender will repossess your vehicle.
This type of loan is also known as title pawns, title pledges, and pink-slip loans. A car title loan usually grants you an amount that ranges from $100 to $5,500. The loan amount is most likely based on your car’s value (about 25% to 50% of it). Also, this type of loan has a short loan term that runs from 15 to 30 days.
Pawn Shop Loans
If you plan to get a pawnshop loan, the lender will require you to place an item of value as collateral. It can either be a piece of jewelry, an expensive watch, or any high-value item. Once you offer the item as collateral, the lender will assess the item’s value and keep it to back your loan as security.
Pawnshop loans don’t require credit checks, unlike traditional loans. However, the loan amount you will receive will depend on the value of the item you placed for collateral. In case you fail to repay the loan, your valued item might be repossessed by the lender.
Taking out a quick loan can help you get cash fast. However, it can also be risky on your part since it tends to come at higher interest rates and fees, with a short repayment period. If you think you can handle these risks, then apply for a quick loan should you need it.