When you’re surviving paycheck-to-paycheck, emergency expenses can be tough to deal with, especially if you don’t have an emergency fund on the side. They are an unfortunate reality of life and the sad fact is that they often happen at the most inconvenient times.
The car may break down when you’re strapped for cash, a member of the family may become sick or get into an accident, or the landlord may be on your neck for due rent. So what do you do?
During such times, emergency loans like the same day loans come in handy. With a same day loan, the loan can be in your bank account in the same day once it gets approved. This is practically within ONE business day!!
Same Day Loans vs Traditional Loans
What is the difference between same day loans and traditional loans? Well, same day loans and traditional loans are different in a number of ways.
• Loan Processing Period: Unlike traditional loans, same day loans are short term loans which are usually approved on the same day (business day). With a traditional loan however, you may have to wait days or sometimes weeks for the loan to get approved. This may not be convenient especially if you need the cash to solve an emergency.
• Interest Rates and Fees: Same day loans carry high costs and interest rates compared to typical loans offered by banks or private lenders. They may attract an APR of more than 400%, which is extremely expensive. Although the interest rates for same day loans are higher, the quick approval process makes them ideal for emergency situations.
• Credit Check: Most lending institutions usually require a credit check to see what your credit score is and how your overall credit history looks like, especially when obtaining a traditional loan. This information is often obtained from the major credit bureaus in your state. Same day loans do not require a credit check. In fact, you can have your loan approved even if you have bad credit. The lack of credit check is one of the reasons why the loan processing time is immensely shortened.
• Collateral or Co-Signer Required: Unlike traditional loans, same day loans typically do not require collateral or a co-signer.
• Repayment Period: Traditional loans typically carry repayment periods ranging from several months to a year or more. On the other hand, same day loans can have repayment periods as short as one week to two weeks.
• Unlike traditional loans, same day loans allow you to meet emergency financial obligations without necessary suffering recurring debt and many months of repayment. However, securing same day loans repeatedly is not advisable as you may find yourself in more debt.
What Should I Consider before Applying for Same Day Loans?
Before applying for a same day loan, it’s important that you have as much information about this type of loan beforehand. This way, you will be to make a more informed decision as to whether or not to apply.
Here are some of the important things to consider:
• Determine how much do you need: Some lenders have limits on same day loans. So it’s important to determine whether the lender can provide the specific amount you need. Also, large amounts attract higher interest rates. So avoid putting yourself in a situation where you’re unable to repay your loan simply because you took more than what you needed.
• Decide whether you really need the emergency loan: Because these kind of emergency loans attract high interest rates, decide whether you absolutely need the money before applying.
• Determine how you intend to use the loan: A same day loan is generally designed to be used for short-term emergencies. It’s not designed for long-term usage or repeated regular usage. To avoid attracting high interest rates, only borrow for short-term emergencies.
• Are there penalties for early payment?- You might think paying off the loan quickly is a great idea but some lenders tend to impose penalties for repaying too early. Be sure to confirm with your lender before applying.
• Are there penalties for late payments?- Most lending institutions charge borrowers penalties and additional costs for late or missed payments. It’s important to confirm with your lender about the consequences of late payment. If unable to make payments on time, you can contact the lender and maybe work out an arrangement that works for you and the lender.
• Do you qualify for a same day loan?- Before applying for an emergency loan, it’s important to confirm whether you are eligible or not. The lender will provide you with a list of requirements that you need to meet before applying.
• Where can I apply for an instant loan?- There are countless instant loan lenders out there. But which one is the best? Well, before applying, make sure that the lender has a solid reputation. A simple web search will give you a list of potential lenders.
How Long Does it Take to Apply?
If you are eligible for a same day loan, it takes a relatively short time to apply. In fact, you should be through in just a few minutes.
There are various ways through which you can apply for the loan.
One, you can log in to the lender’s website and complete the secure, online application. Two, you have the option to call the lending institution and have their representative fill out an application for you. Three, visit their offices and fill out an application form in person.
What is the Maximum Amount I Can Borrow?
Most same day lenders have loan limits. The maximum amount you can borrow may however depend with the lender. Some lenders will offer $2000 -$10,000 for an emergency loan while others have lower limits.
Before applying, confirm whether the lender can provide you with the amount you need.
Can I Apply for a Loan Even if I Have Bad Credit?
Same day lenders do not perform a credit check. This means that even if you have a bad credit, you can still access an instant loan.
How Long Will it Take to Receive the Money?
Because these types of loans do not involve credit checks and lots of paperwork, they get approved relatively fast, usually the same day (business days only). You will have the money in your bank account within ONE business day (rarely, within the same day).
What are the Consequences if I fail to Repay the Loan?
Same day loans are often simple and straight forward- but failure to repay can be a nightmare. Your account may fall into default, which can lead to difficulties in securing credit for a number of years.
If the lending institution is your bank, they may initiate automatic withdrawals from your bank account. You can also expect constant collection calls, bank overdraft fees, garnishment of your paycheck, and of course penalties and additional fees.
To avoid these consequences, it’s important to repay the loan before the deadline strikes. If you are short on cash and are therefore unable to repay the loan, you can explain your situation to the lender. The lender may give you more time to repay or even reduce the interest rate.
What are the Benefits of Finding Same Day Lenders Online?
There are many benefits of finding same day lenders online compared to physical lenders. With online lenders, you can apply for a loan at the comfort of your home without having to travel to their branch. You will get to save time and money as well.
Read also: 5 Factors That Affect Your Credit Score!