Financial emergencies are inevitable. When you suddenly need extra cash and can’t wait days for a bank loan to be processed, what will you do?
That makes them quick same day loans very important.
As the name suggests, you get the money the same day you apply for it. Unfortunately, the loan is associated with higher costs than other types of credit.
If you’ve explored your lending options and are wondering if you should 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 is a loan that is paid out the day you apply for it. Although you would like to receive the requested amount the same day, you will have to dig deeper into your pocket when it comes to the repayment.
For example, you might find that the Annual Percentage Rate (APR) of a loan on the same day is 400%, while other loan types have an average of 9.58%.
If this is your first time considering a same day loan, you may be wondering how it works. It is important to note that same day loans are available in different types.
To understand how they work, you need to know the different types.
Types of same day loans
• Autotitle Loans
It is a loan given against the title of your car. If you default, the lender will sell or take your vehicle. The process does not involve leaving your vehicle with the lender. You can also use it during the loan period. The only problem is if you default.
Most auto title lenders do not require a credit check to approve the loan. The title is sufficient security for the loan. Also, same day loans involve small amounts.
Because of the costs involved, such as the financing fee, the lender may pay out less than you applied for after deducting those costs. If you need the exact amount, this may change your budget.
• Payday loans
They are loans offered in exchange for your next pay packet. You can either go to the lender’s premises or apply online. The application process is clear and the requirements are fewer.
After verifying your information, the lender may request information or documents. What they charge depends on the particular lender. For example, some may ask for your bank details or a blank check. Next comes the withdrawal of your money within a short period of time.
Payday loans have a short repayment period. The lender can withdraw the loan and associated fees from your bank account immediately after your paycheck is due.
The impressive thing about a payday loan is that you can get it even though you have bad credit. The interest on the borrowed money depends on different lenders.
Some may have a flat fee for the entire amount, or a certain percentage for a certain amount. For example 10% interest on every £100 you borrow. If you apply for a $200 payday loan, pay it back with 20% interest.
• Cash advance from credit card
Maybe you have a credit card but can’t use it to pay a bill, or you need instant cash and don’t know what to do. In such a case, there is no need to panic.
Just go to your financial institution and purchase a cash advance using 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 a prepayment. For example, your account must have 5% of the amount you want to withdraw as an advance. Lenders deduct the amount when you receive the advance money.
If you do not have money in your account for this fee, you must first deposit it or pay through your bank’s counter.
If you have an item of value such as an electronic device or jewelry, you can get a same-day loan. You just have to hand over this item to the lender as collateral. This form of credit is called a pawn loan.
The pawn shop does not own your valuable. She keeps it until you pay off your debt. But they can refuse to return it to get their money back if you don’t pay it back.
All same day loans are expensive. But are they worth it? The answer is yes. Below are the benefits of the same day loan.
Advantages of the same day loan
• Fast processing
When you’re in a hurry to get cash, you need to get a loan that takes less time to process. Same-day loan processing and disbursements happen on the same day, making them the fastest to process.
You will know within a short time whether you qualify for the loan. If not, you still have time to look for options later in the day.
Same day loans are more flexible compared to other types. You can get a same day loan that you can pay on the terms that suit you. For example, you choose the repayment period.
• Preference for people with bad credit
It is impossible to get a loan from a financial institution if you have a bad credit history. But it is possible with same day loans. Therefore, they charge a very high interest rate to cover such risks.
• Easy administration
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 learn important details like your loan balance or the payment date.
Same day loans are essential for everyone. As illustrated above, they have many advantages. Processing is also very quick and easy with few requirements. The same day loan is the best option when you need instant cash.