If you end up being hit with a surprise bill because of a financial emergency, you will need to be able to access extra cash in a hurry to make ends meet. In such situations, applying for a same-day loan can be a good idea, as this form of lending is usually disbursed on the same day that you secure approval.
Not only that, but most same-day loan providers have low to no credit requirements. This means that you can also get approved for a same-day loan even if you have a poor credit score. The only issue with these loans is that they are typically more expensive than most other forms of borrowing.
For instance, if you get same-day payday loans online, you can end up with an APR that can go as high as 400%. In comparison, most traditional bank loans tend to come with an average APR of less than 10%, which makes the cost difference extremely sizable.
However, even with the higher fees, the extra convenience, speed, and accessibility of these loans can often make them a viable option for anyone in need of an urgent cash fix.
What Are The Different Types of Same-Day Loans?
Same-day loans are usually limited to small amounts and typically come with repayment periods that last a few weeks or months at most. In this respect, here are some of the most common types of same-day loans that you can get today:
#1. Payday Loans
Payday loans are short-term loans that are designed to help borrowers cover extra expenses until their next paycheck arrives. In most cases, you can borrow up to $1,000, with the entire loan typically due in full in a few weeks’ time.
They also don’t require you to have a good credit score to qualify, and they can be processed in as little as 24 hours. The only downside is that while these loans are very flexible and convenient, they often come with exorbitant fees to reduce the level of risk to the lender.
This is also what makes these loans very difficult to repay. For instance, the average payday loan fee will usually be $15 per $100. And since the repayment period tends to be short, it can often be a challenge for borrowers to make ends meet and repay their loans in full.
Despite that, they can still be useful, co-founder Sarah Ross stating, “They are a viable last-ditch option, especially for anyone with a poor to no credit history who has no way to access traditional loans but is in need of an urgent cash injection.”
#2. Title Loans
Title loans are a form of secured lending that requires you to put up your car as collateral. The lender will usually hold on to your car title, but you will still be able to drive your vehicle while you repay the loan.
You will also be able to access higher loan amounts and get approved for funding, even with a bad credit score. However, much like payday loans, they usually come with extremely high interest rates. Plus, if you default on your loan, there is a high chance that your car will be repossessed.
#3. Installment Loans
A same-day installment loan is usually disbursed in a lump sum that you will be required to repay in monthly installments over an extended period of a few months or years. The benefit of these loans is that you can typically access higher loan amounts than with a payday or title loan.
Plus, no collateral is required. The only issue is that your credit score and income level will play a huge role in determining how much you can actually qualify for. Moreover, if you have a low credit score, you will usually be charged a lower interest rate, and vice versa.
However, not all lenders offer same-day installment loans, but you can often find them by using a credit broker like CocoLoan.
#4. Pawnshop Loans
Much like title loans, pawnshop loans are another form of secured lending where you go to a pawnshop and offer something of value—like jewelry or electronics—as collateral.
You will usually be provided with about 25% to 60% of the item’s resale value in cash, while they hold on to it until you repay the loan. They also come with high interest rates, and if you fail to repay the loan on time, the pawnshop owner will sell the item to recoup the money you owe.
#5. Credit Card Cash Advance
If you need quick cash, another type of same-day loan that you can consider applying for is a cash advance using your credit card. These loans are very easy to qualify for and apply for, as you can simply head over to an ATM to get the cash advance you need instantly.
The only issue is that they come with an upfront fee as well as interest charges that are typically higher than the standard rate. On top of that, cash advances don’t have a grace period, which means that the interest will usually start accruing immediately.
Where Can You Get Same-Day Loans?
Most banks will usually take a few business days to process your loan application, so the best place to apply for such loans is through a direct lender. Luckily, there are several online loan providers that are more than willing to provide funding, even to those with a bad credit history. If you are looking for unsecured bad credit loans, these online lenders can be a viable option.
In this respect, it is often a good idea to use a credit broker like CocoLoan, which ensures that you are matched with only legitimate and trustworthy lenders. Alternatively, you can also apply for same-day funding from credit unions.
Most of them offer quick applications and have minimal credit requirements as well, with the only downside being that you must be a qualified member to secure a loan.
What Are the Pros and Cons of Same-Day Loans?
A same-day loan can be a good option to consider for those in dire need of fast cash, but they also have their own negatives to consider. After all, a good rule of thumb while borrowing any type of loan is to always ensure that you have a complete understanding of what you are getting yourself into.
In this respect, here are the main pros and cons of applying for a same-day loan:
- Fast loan approval and disbursal
- Simple application processes
- Minimal credit requirements
- High-interest rates and processing fees
- Shorter loan periods
- High risk of falling into bad debt
Same-day loans can be applied for and secured through online lenders and credit unions, with funds typically deposited in your checking account within the same day of approval. They also have minimal credit requirements, so they are open to almost anyone who has a steady income stream.
However, you should always be cautious of these loans, as their high interest rates can often make it difficult to repay what you owe. Plus, if you fall behind on any debt payments, you will further complicate an already bad situation.
If you can afford to shop around and wait to get approved for a personal loan with a more competitive interest rate, this can often be a cheaper borrowing option. But if you can’t wait, then make sure to use CocoLoan.
The credit service has an extensive network of reliable same-day loan providers that can provide you with the funds you need today.