You can try to save your money, but sometimes random emergencies can overwhelm your savings. Emergency car repairs can force you to pay big now or lose your ability to get to work. You can’t exactly wait on a heater that gives out in the middle of winter, either. These are the kinds of situations that quick loans are meant to address.
What Are Quick Loans?
Quick loans are loans designed to give you quick access to money when you need it. They usually have a short repayment term. There are, generally speaking, two types of quick loans: payday loans and short term online loans.
Payday loans are small loans against your next paycheck that usually have to be repaid with your next paycheck. The size of the loan is limited by the size of your paycheck, plus a few other factors. Although these used to be the most popular type of quick loan, their high interest rates and late fees have made them a lot less popular more recently.
Short term online loans use online lenders to secure smaller loans than you would usually get from a bank. They have to be repaid in a relatively short term, but not as fast as payday loans do. A few months to a year are typical loan terms. Short term online loans can range from small £100 loans to loans in the thousands.
How Long Does the Quick Loan Process Take?
Unlike banks, which can take days or weeks to make loan decisions, quick loans decisions are usually made on the same day as the application is made. If the lender agrees to the loan, the money should be in your account just minutes afterward.
How Can Someone Qualify for a Quick Loan?
Because the financial institutions behind the short term online loans are not banks, they use other criteria than credit scores to make the loan decisions. That means that you do not need the same high credit score that you would need to get a traditional loan from a bank. You could get a quick loan with bad credit or even no credit history at all.
The thing that quick loan lenders mostly look at is your present financial situation, not your financial past. They check to see if your current income is high enough, compared to the loan and your current bills, that they don’t believe you will have any difficulties paying off the loan. So, if you have a good job that pays decently well then you could get a short term online loan even if you don’t have the greatest credit score. Having a good employment history, one in which you have been at your present job for a while, helps too. It shows that you are reliable.
Some quick loan lenders will want you to have a guarantor before they will lend you anything. That means that they will want you to find somebody else to be on the application with you, to make sure that the loan is repaid on time. Many quick loan lenders do not require you to get a guarantor, however.
How Are Quick Loans Repaid?
The two most common ways of repaying a quick loan are by debit or credit card or by CPA. The former involves making direct payments with your card. The CPA, or Continuous Payment Authority, involves having the lender deduct the funds for repayment directly from your account as they come due.
How Are Quick Loans Supposed to Be Used?
The loan is just money, you can use it any way you want. However, quick loans are best used to cover emergency situations such as car repairs, medical bills, bills for utilities about to be shut off, home repairs, and late rent payments.
The Takeaway
A quick loan can be a life saver in an emergency situation. It can make the difference between keeping and losing your job or your home. It can save small expenses now from becoming huge expenses later. And, because quick loan lenders aren’t banks, they can be a lot more flexible about loan approval for people with bad credit. A quick loan is certainly worth looking into when one of life’s periodic emergencies rears its ugly head.
What did we learn?
