Lending continues to be more and more accessible to people that need financing. Long gone are the days of talking to your local bank in a suite and applying for a loan.
Now, many loan applications can be completed from the comfort of your home.
Furthermore, funding can be done the same day in certain cases. This article will go over in detail how same day loans work, allowing you to see if this is the right type of loan for you.
What Are Same Day Loans?
As you might have guessed, same day loans are loans funded within 24-hours. While this isn’t the actual title of this loan, many reference them as such. Types of same day loans include tribal loans, cash advances or even short-term installment loans.
These can typically be found on the Internet or within a surrounding community. The design of these loans are for emergency cash flow situations.
Also, these are not designed as long-term financial solutions, rather a band-aid until you found a solid fix.
Interest rates tend to vary depending on your creditworthiness, but know that they will be much higher than a traditional loan.
How Same Day Loans Work
Many of the workings of a same day loan are similar to more traditional loans such as mortgages or auto loans. When applying for a same day loan, you will need information such as name, address, social security number and proof of income.
These are standard items across all lending products.
From there, the application process for same day loans should be quick as they are almost always an unsecured loan.
An unsecured loan is a note that is not back by an asset such as a home or vehicle. Once you’ve completed the process and gain approval, you can typically expect funding same day, provided you meet the financial intuitions cutoff periods.
Funds are deposited into the bank account of your choosing and you are free to use the funds how you see fit. Be sure to look at the repayment schedule because you do not want to be hit with late fees, adding to the cost of your note.
Reasons You May Need a Same Day Loan
As previously mentioned, same day loans are designed to be a short-term financial remedy to your cash flow constraints. With that in mind, it’s important to carefully consider your need before applying for a same day loan.
A few reasons you may need a same day loan include:
- Urgent medical expense loan
- Behind on rent or mortgage payments
- Behind on a car loan
- Utility bills
- Any type of emergency expense
You can often times find the best lenders and rates with an installment loan.
Advantages of a Same Day Loan
One of the advantages of a same day loan is in the name, you receive funding same day. This makes applying for a loan advantageous during emergency situations or short-term cash flow pressures.
Funds are deposited directly into your bank account and you are free to do what you want with those funds.
Another advantage is it can prevent you from becoming late on important bills such as utilities, rent or your mortgage. The affect of taking out a same day loan may put you in a better situation than allowing your bills to become delinquent.
The final advantage to consider is this form of lending can typically be done exclusively online. Meaning you can quickly jump on the Internet and fill out the application. Keep in mind to do your research before selecting your final lender.
Disadvantage of a Same Day Loan
A disadvantage to consider with same day lending is the price of the loan. The interest rate on a same day loan is going to be substantially higher than other loan options such as a personal loan. If borrowed without the proper review, it may make an emergency situation worse.
Another disadvantage is it’s a short-term loan, not designed to be used over a long period of time. Lending amounts are typically a couple thousand dollars at most. Depending on your situation, that may not be enough to cover your unexpected costs.
Same day loans are certainly a product worth exploring if you need short-term financial relief. However, keep in mind it is an expense form of lending and should not be relied upon as a long-term financial solution.