It’s not uncommon to occasionally need cash in a hurry. Maybe all of your bills came at once, or you had an unforeseen expense that you just hadn’t factored into your weekly budget. Whatever the reason, you may start to look around for ways to raise cash, fast.
While it’s possible to hit up your friends and family, if you prefer not to burden your nearest and dearest with money matters, it’s all too easy to get attracted to the availability of short term loans.
But caution is required. If you’re thinking of getting a money loan, there a few important factors that MUST be considered. There are different types of loans, financial situations, and other components that will affect how much you have to repay in the long run.
Here are the 3 key tips you need to know if you’re looking to secure a loan.
What is a ‘quick loan’?
A ‘quick loan’ is a personal loan that is able to be funded in less time than a traditional loan. You may be able to find that personal money loans are offered from banks, credit unions, or online lenders, but other non-traditional lenders have them as well.
Getting a quick personal loan is generally going to be an ‘unsecured loan’, so the funds are not going to be secured by an asset or collateral. Collateral is something like a car or a house. Instead, an unsecured loan is based on credit score. (However, even if you don’t have a great credit report, some options may still be available.) If you’re interested in getting cash loans without a credit check, there are several options available for that as well.
The key is to always consider what is going to be the most favourable way for you to get the loan with the least amount of risk.
How to set one up?
Like most things, the options can be overwhelming. Follow these 3 tips when you are looking at providers of short term loans:
Tip: Make sure you can afford it
One of the worst things you can do when applying for a loan of any size is to apply for options that are out of your reach. You don’t want to take out a loan that you won’t be able to pay off.
Lenders are generally pretty on the ball when it comes to who they approve for loans these days. This doesn’t mean though, that there aren’t still instances when loans are given to the wrong people. It is up to you to make sure you are running your own numbers and do your own due diligence before applying for loans.
You first need to find out how much cash you want altogether. This will include the principal (the amount of the loan itself) + the interest + any extra fees that your lender will charge. (You might want to borrow enough to get the amount you need after these fees.)
After this, you can use a personal loan calculator to better figure out what your monthly payment needs to be. While it may be difficult to do this if you don’t have all of the information yet, such as rates or repayment terms from lenders, you can still play with the numbers to see what type of estimates you come up with, and see if your budget can stretch that far.
Tip: Find personal lenders with fast approval
There are plenty of lenders you could apply for a loan with, but they are not all the same. A personal lender is generally going to give you better interest rates and fees, but you need to shop around to ensure you are getting the best rates possible.
It is also important to remember that lenders are not going to process your application as soon as it is submitted. It generally takes at least two or three days for an application to be processed and approved, or longer in some cases – so finding one with a faster turnaround can be a good idea if you’re in a pickle. After this, you will be funded the money and do with it whatever you intended.
Tip: before you apply, you will need to have your identification and proof of income ready. This will help you complete and submit an application more quickly and efficiently.
And if you’re wondering how much interest you’ll pay for the convenience of getting money in a hurry? Beware – personal loan interest rates typically depend on your credit rating, but you will find rates between 6 and 36 percent on average. (Don’t forget that a lot of lenders offer quick personal loans and add an origination fee too.)
Tip 3: Read and understand the fine print
Before you sign anything or agree to any terms, you ALWAYS need to read the fine print. You need to know and understand the terms and conditions on any loan that you are considering.
This is super important as there are many unscrupulous lenders who may try to be tricky and add hidden costs or other factors into the contract without your knowledge. Ask the lender for a complete disclosure of all the terms and the fine print so that you can review them yourself.
Pay special attention to clauses such as fees for late payments, failed debits, checks, application fees, and anything else that you may have missed previously.