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Don’t Sweat a Financial Emergency, Same-Day Loans Are a Quick Cash Solution
No matter how careful you are with your budget, life has a habit of throwing curve balls your way. These challenges invariably mean having to spend money, and often we don’t have the funds to pay for such unexpected disasters.
Everyone has suffered an emergency of some kind that needs a quick injection of cash. Emergencies such as plumbing, heating, or other household problems, a car that won’t start, a medical issue, or a pet that falls ill are all common disasters that we all face. Unfortunately, many of these emergencies tend to come around when there’s still a great deal of time left before the next paycheck, and most people these days do not have rainy-day savings that could fund emergencies.
This is where a same-day loan can bridge the gap between the emergency and the next payday. These loans can be a lifesaver, and you will be surprised how easy it is to get one. There are dozens of same-day lenders all hawking their trade on the internet, but before you apply for a quick approval loan, you need to do some research and understand what it is you will be looking for.
Borrowers should not confuse same-day loans with debt consolidation loans, even though some debt consolidation loans can be arranged in one day. These are very different entities. If you are struggling with loans or debts that are all carrying high-interest rates, it makes financial sense to approach a financial institution and negotiate a debt consolidation loan.
With a debt consolidation loan, you can use the funds to pay off all the other high-interest-bearing loans and debts. You can then repay one loan with a lower interest rate over a period that you can more easily afford. Before applying for a debt consolidation loan, it is wise to compare the top debt consolidation loans to find the best fit for your particular circumstances. If you have gone down this route, be aware of the steps that you have taken and don’t repeat the error of finding yourself with loans you cannot afford to repay.
What Are Same-Day Loans?
These are short-term loans that are intended as a financial bridge to cover unexpected emergencies. They are usually repaid over a few weeks or a couple of months and often carry higher interest rates.
Are Same-Day Loans and Payday Loans the Same Thing?
These can be the same thing, but aren’t always. A payday loan is just what its name implies. The loan must be repaid with your next paycheck, but a same-day loan may have terms that allow the repayment over a longer period, or it may fall due on your next payday.
How to Apply for a Same-Day Loan
The application process for same-day loans is very straightforward. You will go onto the lender’s website and complete an application form. Your application will be considered by the financial institution, and if you are approved, you will be prompted to accept the loan offer. Take the time to consider all the details in the offer, and if you agree with the lender’s terms, accept the offer. The funds will be deposited into your bank account on the same day.
Most lenders have the same basic requirements. These include the applicant being a permanent resident of the United States, and having a verifiable email and residential address. Borrowers must also be over the age of 18 and be able to provide a positive identification document of some kind, such as a driver's license. Lastly, they must have proof of a regular income and an active checking account.
Many lenders have a basic income amount, such as $1,000 per month, so ensure you check that you meet the requirements before applying for the loan.
Choosing a Same-Day Lender
You may want the cash quickly, but it’s unwise to rush and not ensure that the lender with whom you intend to do business is reputable.
Many loan application companies on the internet are not financial institutions themselves. They are middlemen who connect prospective borrowers with lenders who may be prepared to lend them money. When you get to a website, it is useful to know if the company is a middleman or the lender themselves. Using a middleman can be valuable as they will have access to many prospective lenders, so you’ll have a wider choice of options.
Before applying for the loan, consider your budget. Same-day loans carry higher interest rates, so be realistic about how much you can afford to repay without overextending yourself. It is too easy to get into a debt spiral, so use an online loan calculator to help you set a realistic amount that you can afford to repay.
Next, review each of the lenders that you anticipate approaching and compare their requirements. The requirements for a loan vary from one lender to the next, so check what they need from you and choose a lender with a simple, easy-to-understand process.
Don’t stop at reviewing their requirements. Do as much online research into their reputation as you can. Look to see if the institution belongs to a reputable industry association such as the Online Lenders Association or their rating at the Better Business Bureau. Undertake an internet search and read any articles that mention them. Pay special attention to customer reviews. Use your common sense, and if there are one or two bad reviews, you can generally discount them, but if the majority of the reviews are bad, then cross the name off your list, as this could indicate that there are headaches for you down the road.
Be sure that you compare the interest rates charged by each lender. Many lenders believe that high-interest rates are justified because of the higher risk due to more lenient lending requirements, fast payouts and short loan repayment terms. You should compare the interest rates offered to you before completing the application.
Ensure that you fully understand the terms and fees that are applicable. Look for terms such as the length of time that you have to pay off the loan and if the lender will charge a fee for paying off the loan early. Also, find out if there are any origination fees that have to be paid, and if so, how much will you have to pay. Another question should be, what will happen if you wish to extend the payment period? Will you be liable for additional costs, and again, if so, how much? All of these factors should be factored into your decision on which lender to use.
Advantages of Same-Day Loans
There are advantages to same-day loans, and some of the most common are:
These loans are convenient to tide you over in an emergency situation.
There are a wide range of repayment conditions. Some lenders will offer up to 72 months for repayment of a sizable loan. When considering the length of time, remember that the longer you take to repay the loan, the more interest you’ll have to pay.
These lenders do not typically check your credit score. For people with poor credit scores or thin credit lines, this can be a plus.
Unlike personal loans, same-day loans have less stringent requirements and ask for less detailed documentation.
Disadvantages of Same-Day Loans
These loans can be lifesavers when an unexpected disaster hits, but there are some downside issues that you should consider:
Look carefully at the interest rates that are attached to your loan offer. These loans can carry exorbitant interest rates, with some having an annual percentage rate (APR) of well over 100%.
Same-day lenders are often viewed as predatory. Use a recommended lender, and do not be tempted to do business with a lender where you may end up with unaffordable terms that escalate rapidly.
It is very easy to get trapped in a debt spiral due to short repayment terms and high interest rates. Never be tempted to take out one loan to repay another.
To Wrap Up
Same-day loans are a valuable resource when you’re faced with a problem and have no emergency funds. They can be a little too easy to arrange, so to avoid falling into a debt spiral, you must have clear reasons for arranging a loan. Be brutally honest with yourself and have a good understanding of your budget so you know what you are able to pay.
Not all lenders are created equal, so do your homework before clicking the accept button, and be certain that you are borrowing money for the right reasons and that you can afford the terms on offer. If you‘re satisfied that you can repay the terms without causing further financial distress, click that accept button and use the funds to resolve your problem. You should do this so as to avoid any misinterpretation of information which may cause you issues in the near future.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.
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