Finding yourself short of cash during a difficult time can be a challenge, and quick loans may seem like a smart answer to help you cover your costs. There are, however, some things that you should consider before taking out a loan, to ensure that you have all the facts at your disposal – and we have put together all that you need to know to get your hands on quick cash.
What Is A Quick Loan?
A quick loan is an unsecured personal loan that is available for people who do not qualify for other types of credit. The amount borrowed will vary from lender to lender. The loans work by allowing borrowers to borrow money against their future wages or salary. This means that they repay the loan over a set period of time, usually between two weeks and six months.
When Should I Take Out A Quick Loan?
There are certain situations when it can be smart to take out a quick loan, and these may include:
- To Cover An Emergency Expense
Taking out a quick loan can help you cover unexpected expenses, such as car repairs, medical bills, utility bills, or home improvements. However, you shouldn’t rely on quick loans to cover long-term expenses, such as mortgages, student loans, or rent.
- To Make Payments On Bills And Debts
It is possible to use a quick loan to make regular monthly payments on bills and debts. This includes making payments on credit cards, overdrafts, or even utilities.
- To Pay Off Debt
A quick loan can be used to pay off existing debts, including credit card balances, overdrafts, and personal loans.
- To Buy Something New
It is possible to use a short-term loan to buy something new, such as furniture, appliances, or electronics – though caution should be exercised to ensure that you can afford to pay back the loan quickly.
How Do I Know If I Can Get One?
If you are looking for a quick loan, it is important to understand what type of loan you are eligible for. In order to apply for one, you must first meet certain criteria. These can vary between providers, but typically include:
- You must be aged 18 years old or older.
- Your income may need to reach a certain threshold
- You may be required to provide proof of employment
- You must have a bank account.
It is important to do your homework before choosing a provider for a quick loan, as different lenders and firms will likely have different limits and requirements – including potential credit checks, though this is less common for this type of loan.
The amount you can borrow depends on your situation. Most providers will ask you to fill in a form detailing your income and expenditure, along with information about your current financial position. Based on this, lenders will calculate what you can afford to borrow, and give you a rough idea of how much you can borrow.
What Are The Benefits Of A Quick Loan?
There are many benefits to getting a quick loan, and these include:
- They Can Help You Cover Emergencies
The main advantage of quick loans is that you can access funds quickly to cover emergency costs or charges. These types of loans can also be useful when you want to make payments on bills or buy items such as furniture or appliances.
- You Can Pay Off Debt
When you take out a quick loan, you can also use the money to pay off debts, rather than having to wait until your next payday, and this can save you hundreds in charges and fees for late or missed payments – instead, a quick loan allows you to meet your financial obligations more easily and on time.
- You Receive Funds Quickly
Another benefit of quick loans is that you receive the money within 24 hours – and often sooner – which makes them ideal if you need to get money fast. They are also convenient because you don’t have to go through any lengthy application process, so you can get the money you need without delay.
- Quick Loans May Be Available For People With Bad Credit
While most quick loans require good credit scores, there are some that offer loans to those with poor credit ratings. It is worth checking whether a provider offers this option, as it could mean that you will be able to get a better deal.
What Are The Disadvantages Of A Quick Loan?
While quick loans are great for covering emergencies and paying off debt, there are still disadvantages associated with them. Some of these include:
- They Aren’t Always As Convenient Or Easy To Access As Other Types Of Lending
Although quick loans are easy to obtain, they can be difficult to manage. Because they are unsecured, you won’t be given any security like you would with secured loans. Therefore, you should ensure that you keep track of all the details about your loan, such as how much you owe and where you paid it back from. This means that you need to be careful not to miss repayments, otherwise you risk heavy penalty fees.
- They Have Higher Interest Rates Than Secured Loans
Although quick loans aren’t always as expensive as other forms of lending, they tend to carry higher interest rates than secured loans. This is because they are unsecured loans, meaning that you don’t provide collateral to secure the loan. If you default on the repayment terms, you may lose your property or vehicle.
If you are looking for an alternative to payday loans, then you might consider taking out a personal loan. Personal loans are available at competitive rates and allow you to borrow up to $25,000, depending on your circumstances.
A quick loan isn’t suitable for everyone, but it can be very useful for short-term borrowing needs. However, before applying for one, you should think carefully about what you need the money for, and whether you can afford to repay it and ensure that you have all the facts at your disposal.