Sometimes surprise expenses come up; things you never had in your budget so you do not have available cash to sort them out. Like your car breaking down or an emergency at home that needs to be fixed as soon as possible.
When things like these happen, you may have to borrow quick cash, and sometimes, you may not have people around that can help you out in this regard. This is where same-day låncome in. Same-day lånare loans that the borrower can get cash for on the very day they apply for it.
Getting lånpådagen (same-day loans) you apply for it can save you in dire times; however, these instant credits usually come with a high-interest rate. In this article, we will discuss the different types of this kind of lån. In the end, we believe you’d be able to decide if it’s worth it or not.
Same-Day lån– What Exactly Is It?
Same-day loans can be otherwise called emergency loans. As we have said and you can tell from their names, credits that fall under this category are typically disbursed the day the borrower gets approved for them. These credits are usually small amounts and their terms could last between a couple of weeks and sometimes even months.
While this may be a convenient and quick borrowing alternative, it is a lot more expensive when compared to other alternatives. For instance, when you get a regular personal loan of 24-month, the annual percentage rate (commonly called its abbreviation APR) should be around 9.58 percent. But on the other hand, a same-day credit could carry as much as 400 percent APR.
This difference is so vast and it can make paying back the loan a bit problematic if you’re not financially stable. Even if you were, you’d probably still feel some frustration having to pay that much back.
This is why most people see this borrowing option as the last resort after all other means of getting emergency cash have been considered. Also, if you can wait for one or two weeks, you may get a credit card or personal loan approval. These are cheaper borrowing alternatives and you could still use the cash gotten to do anything you want.
Same-Day Loan – Types
1. Payday Loan
You can apply for these either at storefronts or online. They are specially designed to help people pay their expenses until their next paycheck. People who have bad credit often find it difficult to get loans, but getting a payday loan is quite easy even when your credit is bad. You can visit https://www.investopedia.com/ to learn more about how bad credit can affect you.
When the borrower applies for the loan, the lender might either ask for details of their bank account or a blank check. Sometimes, the money borrowed will be removed from the borrower’s account directly once they get their paycheck.
On average, the fee on this is 15 dollars for every 100 dollars for a 2-week loan. This would round up to about 400 percent APR.
2. Pawnshop Loan
In this case, the borrower has to offer the lender an item of value such as jewelry as the loan collateral. When you turn in the collateral, you’d get a part of the item’s worth in cash, the pawnshop will also keep the item till you pay back the money borrowed.
Fees vary from one pawnshop to the other. But for example, if you are charged 20% for every 80 dollars you get. For 30 days, this will be 16 dollars for an 80 dollars loan; this would round up to about 240 percent APR.
3. Cash Advance on Credit Cards
If you have to sort an urgent bill that your card can’t settle, you can decide to take an advance on the card. This is a sure and fast way to borrow money as you can apply for the advance and then withdraw the money at the bank or ATM (so long as your card has a PIN).
However, there’s a drawback with this method of borrowing. The borrower usually has to pay a fee upfront. Like every other option on the list, cash advances on credit cards also have a high-interest rate; often a lot higher than standard purchase APR.
For instance, a standard purchase APR might be 14% while the interest rate on a cash advance could be 24%. The sad thing about this is that cash advances do not have a period of grace the way your card balance does. So, when you borrow money this way, the debt starts accumulating interest immediately.
4. Title Loan
To get this type of credit, you’d have to use your car as collateral. You’d give the lender the title of your car and they will keep this and give you some cash. You’d still be in physical possession of your vehicle, so you can still use it while paying back the money borrowed.
But, if for some reason you fail to meet the terms of the loan (you do not pay back when you were supposed to) the lender can take possession of your car.
The lender may charge several processing fees. A financing fee will also be charged, this can be as much as 25% every month; this would be about 300% APR. Click here to find out more about title loans.
Before taking a title loan, ensure you figure out a payback plan. This is very important due to the chances of losing your car if you don’t pay it back.
Conclusion
Same-day loans are very convenient, especially when you are in dire need. However, paying back can be quite a challenge due to the high-interest rates these loans come with. Not paying back can even cause a way bigger financial problem than you were originally in, sometimes, you may even lose valuable properties like your car.
So, before you get any type of emergency loan, ensure you explore all your options. You could ask friends and family members first. If you don’t have people around to ask, then consider speaking with the service provider or creditor you need to pay. Who knows, they may agree to a bill extension or payment arrangement that will suit your situation.
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