By Contributing Author
Suppose you are in dire need of immediate funding to cover unexpected expenses, such as repairs or medical emergencies. Or maybe you are struggling to pay your monthly bills with the deadline fast approaching. Quick loans may be the solution you are looking for.
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What is a Quick Loan?
A quick loan is typically a personal loan that gives you fast access to cash. It is best used for emergency purposes. Furthermore, credit unions, traditional banks, and online lenders offer this type of personal loan.
Banks and credit unions may offer you a quick loan if you meet their requirements. It can either be an installment loan or a personal line of credit. If you choose an installment loan, you should repay the loan in a regular fixed monthly payment set over a period. On the other hand, a personal line of credit shares similar characteristics to a credit card wherein you can withdraw money up to a specified credit limit.
Online lenders process loan applications faster than traditional banks or credit unions. Just like other lenders, online lenders will still check on your credit status. However, most of them are not stringent as compared to banks and credit unions.
Most of the time, quick loans are unsecured personal loans. This means that collateral is not required to get this type of loan. Getting an unsecured personal loan saves you from putting your assets on the line, such as your house or vehicle.
Other Types of Quick Loans
Aside from installment loans and personal lines of credit offered by various lenders, you can consider other types of quick loans. To know your options, here are the following:
Payday Loans
A payday loan is a quick personal loan that can get you fast cash up to $500 or less. It is also known as check advance loans or cash advance loans. Moreover, this type of loan is typically due on your next payday.
It is vital to keep in mind that payday loans can charge higher interest rates and fees. Hence, you should repay it as soon as possible to prevent yourself from being in a debt cycle. If you can’t afford a payday loan, you can search for payday loan alternatives that offer convenient interest rates and fees.
Car Title Loans
A car title loan, also known as a fast auto loan, is a secured type of personal loan. In order for you to qualify in this type of loan, you should own a car or have equity in it. A lender will then require you to pledge your car’s title as collateral to get your loan application approved.
The amount of money you can typically borrow in a car title loan ranges from $100 to $5,500. If you choose this type of loan, the lender gets to keep your car’s title or registration until the loan gets repaid. Moreover, if you fail to repay the loan, your car can get repossessed by the lender.
The amount of time you have to repay the loan tends to run for 15 or 30 days. Hence, you should have sufficient money within that period to save your collateral. Although the loan is named a car title loan, you can also pledge any vehicle type, such as a motorcycle.
Pawn Shop Loans
A pawn shop loan requires an item of value to serve as collateral. The item will be evaluated and kept as collateral for the quick loan you are going to get. This means that if you fail to pay back the loan amount, the pawnshop will get to own the item of value you pledged.
The item of value can either be jewelry, electronics, musical instruments, or other high-value items. You have to repay the loan’s full amount, including the interest rates and other fees to get the collateral. Lastly, the period in repaying the loan varies from state to state.
Peer-to-peer Lending
Peer-to-peer lending is also known as P2P lending, marketplace lending, crowdlending, or social lending. This type of funding option existed since 2005 and can help you borrow money directly from individual investors. Instead of financial institutions earning interest rates from loans, individual investors make money out of it.
There are P2P websites that connect borrowers directly to individual investors that can lend them money. The website will present the rates, fees, terms, and enable you to process the loan application online. Furthermore, after reviewing your application and getting approved by the investor, the website will process the cash transfer and repayments.
Takeaway
Quick loans usually come with higher rates and fees. On the bright side, it can really help you get fast cash to cover your immediate expenses. In order to save yourself from future financial problems, you should know how to manage your debts and pay off quick loans first. Furthermore, always remember to consider your financial situation first before applying for any loans, especially quick loans.
