It can happen to anybody. You get ready for work and realize your car won’t start. You need to take the car to a repair shop but your bank account is not exactly overflowing at this particular moment. Or your boiler breaks in the middle of winter. Maybe you have a medical issue that took you by surprise. These kinds of situations are exactly why people apply for same-day loans.
Even though the need is an emergency, you still should take a little time to compare options and familiarize yourself with how these loans work.
What Are Same-Day Loans?
Same-day loans are usually small loans that you can apply for and receive very quickly. Many lenders will claim that you’ll get the money in a matter of hours but, in reality, it may take two to three days.
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You can go online and compare options for same-day loans. This way you make sure the lender best suits your needs. Pay special attention to the APRs (annual percentage rate of interest). Online lenders are also typically faster and you have the advantage of being able to google everything you don’t understand. Lastly, you have a written record of what was said to you.
In order to obtain a loan, you need an ID, an active bank account and proof of income. If you have a poor credit score, you’ll probably still be able to find a lender. However, your credit score will impact your APR.
When discussing your terms and conditions, be sure to ask what happens if you miss a payment and how much will it cost you extra (not just interest, fees as well).
Same-Day Loan Advantages And Disadvantages
Same day loans can help you get out of a difficult situation. Still, when you’re assessing each individual lender and the type of loan you need, be sure to consider the pros and cons.
The biggest advantage is that they’re much faster. They’re also much more accessible that a personal loan from a bank, with fewer requirements and less hassle. Another plus is that the payment plans are usually quite affordable.
Now for the disadvantages. The most obvious is higher interest rates. There are also deceptive lenders that intentionally mislead their clients and force them into a sort of vicious circle of debt. Lastly, same day loans generally work only for situations when you need small amounts of money.
Alternatives to Same-Day Loans
The easiest alternative to a same-day loan is to borrow from friends or family. Borrowing from people you know usually means no interest rates and you have more flexibility in payment dates. Of course, they might not have enough money to loan, or you may not feel comfortable taking money from them.
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Another option to avoid a same-day loan is to get a cash advance on your credit card. Be cautious with this option and compare the APR from your card verses a same-day loan. Take on as low an interest rate as possible.
Your final option is a pawn shop. If you have valuables like jewelry or electronics, you can take them to a pawn shop and get cash instantly. You can even extend the payment date in exchange for a fee. Remember, if you don’t pay the loan back you lose the item you pawned. This is particularly painful when pawning items with great sentimental value.