November 19th, 2019 | Updated on June 30th, 2022
Probably everyone has heard about the quick loans, but still, most people don’t know how they work. Sometimes you need to get money instantly, and then going to the bank will not solve your problem.
Traditional bank loans take much longer because you have to fill in the application, get it approved, and then wait for the cash, which sometimes takes up to 7 days. Your application might also be rejected, and you will not get any money at all.
What Are Quick Loans?
Quick loans, on the other hand, are different. Once you decide to choose them, the money is issued in a short amount of time. Sometimes you can get the cash in a few minutes. Also, approval processes are less stringent. Even people who have bad credit can get them.
According to Nation 21 loans, your credit score is bad if it drops below 630. When it happens, you will be less likely to get a loan. Also, people with excellent credit scores pay less for the same loan from the same company than people with a bad rating.
Instant loans are offered by credit unions, banks, online lenders, and various types of non-traditional lenders.
Something that distinguishes quick loans from the traditional ones is that they are usually unsecured. It means that funds aren’t secured by any assets such as property, car or home.
If you need money fast, and the bank is constantly rejecting your loan applications, you should consider taking a quick loan. Usually, the amount of money instant loans offer is from a few hundred up to several thousands of dollars.
Of course, falling into debts is something you should avoid in general. But sometimes, you don’t have any savings, and various unexpected expenses appear.
In certain situations, it’s the only way to get the money fast. People are taking quick loans the most often in the following circumstances.
1. Medical Issues
Health is the most important thing, and you should never save on it. Unfortunately, health care isn’t cheap. If you or any family members need immediate treatment, taking a quick loan is probably the best solution.
Some clinics and hospitals provide a discount when you pay cash right after the service. In that case, instant loans might even save you some money.
2. Car Problems
Having a car is not a luxury, but a must nowadays. It is convenient and makes life easier if you want to commute to work or school. But it often happens that something stopped working and your car requires instant repair.
Mechanics will fix your car, but you’ll have to cover all the payment cost at once. And sometimes it can be pretty expensive.
You won’t get your car until you pay for the service. But if your payment delay is long, you can lose your car because of the mechanic’s lien. It enables the garage to take over your vehicle because of unsettled payment.
Losing your car is the last thing you’d want, so taking a short-term loan will let you avoid a lot of stress and get back your vehicle in no time.
3. Avoid Late Fees
It’s possible that you already are in debts, and you struggle to pay for late fees. They can be painful and harm your budget significantly. It is one of the situations when quick loans might be beneficial. You want to do everything to avoid a negative report on your credit score.
Everyone’s situation is different, and we need money for various purposes. But you have to keep in mind that over 75% of people working in the US live paycheck-to-paycheck, and this is something you should try to prevent.
Interests might be expensive, so you should always plan how much you have to borrow and what will be the total cost of the loan.
Contrary to popular belief, quick loans are not something bad. They are useful and needed, sometimes it’s a better option to choose than a traditional loan.
However, you should remember that borrowing money is the last resort, and you should do that only if you have no savings.