To better understand same-day loans in general, it’s important to know what the term “same day loan” means. This is the name given to borrowing short-term unsecured finance with a high interest rate for an emergency expense that you have not budgeted for or been able to save for.
The interest rate is usually on the higher side of what you would normally pay at a bank or similar financial institution.
Same day loans can be categorised into three main areas, namely payday loans, personal loans that you can raise at pawn shops, or loans that can be taken directly from your credit card balance.
Payday lenders provide a person with the opportunity to pay their loans on the next payday or even before. These types of lenders offer the same day application release of funds. This type of same day loan is beneficial during unforeseen events such as receiving a salary late, unexpected medical expenses, or emergency vehicle repairs, to name but a few.
However, be aware that some lenders can charge an annual percentage rate (APR) that could be as high as 400 percent of the loan amount depending on the country you live in. In order to shield the borrower from such grossly inflated rates, many countries have tightened laws pertaining to fees that can be charged on same day loans. The high-interest rate, according to lenders, is justified largely by the absence of thorough credit checks.
This type of loan enables the borrower to repay a loan amount plus interest in installments during a set period, usually ranging from three to five years. Various personal loan providers offer online applications with same day funding. This type of same day loan is the most desirable because it offers more reasonable interest rates that usually don’t exceed 36 percent over a year compared to the high interest mentioned above in the “payday loan” scenario.
If you have a Credit card, this is possibly the best option to look at because institutions provide cash advance services enabling their clients to withdraw money from an ATM, bank, or even a supermarket counter.
You can also simply log in to your credit card online account and avail yourself of the cash advance feature. A processing fee is usually charged, which can either be a fixed amount or a percentage of the loan amount depending on the institution.
The interest rate for cash advances is generally higher compared to the interest incurred when making purchases with your credit card.
When seeking to understand the various same day loan financing options, you might want to consider the following when deciding what to do:
Funding Speed: If your situation is urgent, then quickly getting finance is your priority and you will have to look at lenders who offer same day payouts as opposed to those who take a few days to grant approval. You will usually find that online lenders will disclose how long it takes, so you will know when you will receive your money.
Loan Costs: Speed might be the driver for your loan as opposed to the cost of the loan, but it’s very important to check and compare fees and the annual percentage rate from various lenders before making your final decision as to which lender to go with.
Lender Features: Besides your loan costs, it’s beneficial to be aware of payment options and features offered by the various lenders during the loan period.
Some lenders will allow you to skip a payment if necessary, while others may allow you to choose your own payment date, or forgive late payment fees. This might come in handy should you run into difficulties during the loan period, and negotiating the best deal up-front is in your interest.
If urgency is your priority, then you are most probably ready to take the plunge and move forward with your payday loan.
Let’s look at how an “online same day” loan is awarded:
- The loan application can be made online, through a website, mobile app, or phone call.
- It’s a relatively short and straightforward application process taking just minutes to an hour to two for approval.
- There is an absence of extensive credit, home, and employment validations.
- Submission of requirements can be performed online with no condition of personal appearance.
- When approved, funding is released within the same day in contrast to other loans that take several days or weeks before the money is handed to the applicant.
- There are no credit checks, making it appealing for those with a low credit rating or those still establishing their reputations.
So what are the requirements for same day loans?
Here are some of the basic requirements to qualify for online same day loans. Do note that lenders have varying demands and criteria depending on their internal processes.
You will need:
- An active checking account
- A personal bank account
- Proof of income
- Regular income in the last 90 days
- Valid identification
- To be at least 18 years of age
- To be a permanent resident or citizen of the country
- An active mobile number and/or email address.
Although online same day loans are appealing because of their convenience and quick turnaround time, it is essential to consider the following before proceeding with your application.
Financial Status: Consider your financial situation and if you can realistically make the repayments. The cash you may get now may provide you with a level of short-term relief and convenience, but it is also essential to plan on the repayments and make sure you can afford them, otherwise you could end up in a debt spiral.
Purpose: Everybody has their reasons for applying for a loan. Even if you need cash urgently, set aside time to evaluate if the loan is worthwhile and whether there aren’t other alternatives that you could look at such as borrowing from a family member. This could be less costly, and they might be more flexible if you miss a payment. Remember, the euphoria of taking a Payday loan will be long gone, and you will still have the debt to service.
Fees and Interest Rates: Research the fees and the interest rates offered by various loan providers and make sure that there are no hidden costs. Ensure the transparency of these fees as well. Also be mindful of the type of payment terms they impose – some require interest payments while some apply a fixed charge.
Loan Requirements: Even if the application is online, lenders require some documentation to be submitted or for you to meet specific requirements. Have the essentials ready to ensure a smooth transaction and that you’ll have the funding on the same day.
Online same day loans are truly a convenient manner of getting the cash you need, when you need it, and they are also appealing because of the lenient credit checks and the simple application requirements.
Nevertheless, to make sure you are well-informed and understand the benefits and risks associated with same day loans, it’s important to do research and thoroughly investigate the available options before you finally go ahead.[Image – CC 0 Pixabay]