Financial emergencies are inevitable. When you suddenly require extra cash and can’t wait for days to process a bank loan, what will you do?
That’s what makes the quick same day loans very important.
You receive the money the same day you apply for it, as the name denotes. Unfortunately, the loan comes at a higher cost than other loan types.
If you’ve been exploring your loan options and wondering whether to consider a same day loan, this article is for you. You will learn everything you need to know about the same day loan.
Let’s start with its meaning.
What is a Same Day Loan?
It’s a loan disbursed on the day you apply for it. Though you enjoy receiving the amount applied for on the same day, you will have to dig deeper into your pockets when paying back.
For instance, you could find that the Annual Percentage Rate (APR) of the same day loan is 400%, while other loan types have an average of 9.58%.
Comparing the two, you may opt to wait for days but enjoy a cheaper option. But in case of an emergency, loans with lengthy procedures cannot help you. Same day loans come in handy in such situations.
If it’s your first time considering the same day loan, you may wonder how it works. It’s critical to note that same day loans come in various types.
To understand how they operate, you need to know the different types.
Same Day Loan Types
• Car Title Loans
It is a loan given against your car’s title. In case you default, the lender sells or takes your vehicle. The process does not entail leaving your vehicle with the lender. You still use it during the loan period. The only problem is when you default.
Most car title loan lenders don’t require a credit check to approve the loan. The title is enough collateral for the loan. Besides, same day loans entail small amounts.
Also, due to the costs involved, like the financing fee, the lender may disburse less than you applied after deducting them. If you require the exact amount, it may alter your budget.
• Payday Loans
They are loans offered against your next pay packet. You can either walk into the lender’s premises or apply online. The application procedure is concise, and requirements are less.
After verifying your details, the lender may ask for information or documents. What they ask for depends on the specific lender. For example, some may require your bank details or a blank check. What follows next is the disbursement of your money within a short time.
Payday loans have a short repayment period. The lender may deduct the loan and fees incurred from your bank account immediately after your paycheck matures.
What’s impressive about a payday loan is that you can get it even though you have bad credit. The interest paid on the money borrowed depends on various lenders.
Some may have a flat fee for the whole amount or a certain percentage for a specific amount. For example, 10% interest for every £100 you borrow. If you apply for a £200 payday loan, you’ll pay it back with a 20% interest.
• Cash Advance from Credit Card
You may have a credit card but can’t use it to pay a bill or require instant cash and don’t know what to do. In such a case, you need not panic.
Just walk into your financial institution and acquire a cash advance with your credit card. Alternatively, if your card has a pin, go to the nearest ATM and withdraw the cash advance.
The only problem with a credit card cash advance is that it requires an upfront fee. For example, your account must have 5% of the amount you want to take as advance. Lenders deduct the amount when you receive the advance cash.
If you have no money to cater for that fee in your account, you will need to deposit it first or pay over your bank’s counter.
• Pawnshop Loans
If you have a valuable item such as an electronic device or jewellery, you can get a same day loan. You only need to surrender that item to the lender as collateral. This form of credit gets referred to as a pawnshop loan.
The pawnshop does not own your valuable item. It holds on to it until you settle your debt. But they may refuse to give it back to recover their money if you fail to pay it back.
All the same day loans are expensive. But are they worth it? The answer is yes. The following are the benefits of the same day loan.
Advantages of the Same Day Loan
• Quick Processing
If you’re in a hurry to get some cash, you’ll need to borrow a loan that takes less time to process. Same-day loan processing and disbursement happen the same day, making them the quickest to process.
You will know within a short time whether you’ve qualified for the loan. If not, you still have time to look for options within the day.
• Flexible
Same days loans are more flexible compared to other types. You can receive the same day loan to pay on terms that suits you. For example, you choose the period to repay.
• Favours People with a Poor Credit Rating
It’s impossible to get a loan from a financial institution when you have a bad credit history. But it’s possible with same day loans. That’s why they charge a very high-interest rate to cover such risks.
• Easy management
Most same day loans have an online platform. You can easily borrow or pay back through your online account. It helps you manage and control the activities of your online account. You can know essential details such as your loan balance or when to pay it.
Conclusion
Same day loans are essential to anyone. As illustrated above, they have many benefits. Processing them is also very fast and easy with few requirements. The same-day loan is the best option if you require instant cash.
