What is A Same-day Loan and How Does It Work? 

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Bad credit is usually the product of bad financial decisions and problems made over a long period. While it can be intentional for some, for many others, it is just dumb rotten misfortune. It usually builds up due to not having some savings set aside when needed, such as for emergency events like school fees. 

It is not news that people who need financial assistance the most are not people who have high PICO scores but people who have low scores. After all, banks and other financial institutions, such as credit unions, do not lend money to people with bad credit scores. Only direct lenders (online and offline) can help at this time. And here’s why.

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Bad credit loan lenders usually do not have a minimum credit score prerequisite. Also, they do not carry out credit checks to ensure a faster process. So, if you need cash as soon as possible and do not have a good credit score, then loans are the best option. A good (and commonly-used) loan type is a same-day loan. HonestLoans is a good place to get same-day loans. However, one needs to note/know that each lender has its terms and conditions. 

When many people find themselves in dire financial waters, they usually make choices due to wanting to make quick decisions, such as choosing the first lender they see. This is very wrong. Selecting a loan lender without checking the terms, conditions, and requirements is usually a bad choice that can land one in more financial trouble than one started with.  This article discusses same-day loans and how they work. Let’s start by finding out what a same-day loan is.  

What Are Same-Day Loans?

Otherwise known as an emergency loan, a same-day loan refers to any loan paid out on the same day one is approved. They are a type of short-term loan and are usually more expensive than other loan types. 

For instance, a same-day loan can possess an APR of about 400% when calculated in percentage terms. However, compared to a personal loan, the mean APR for a personal loan to be paid in twenty-four (24) months is 9.58%, and the mean APR for credit cards that assess interest is just over 16%. This is according to a May 2021 survey.   

If you need quick funds and your emergency savings have been used on other important stuff, it might be an excellent idea to get the same-day loan on this page from HonestLoans.

How A Same-Day Loan Works

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Most same-day loan applicants get the money they need the same day they apply for the loan. However, the amount of time it will take to approve it is mainly dependent on many factors. The most important factors are the amount to be borrowed and how long one plans to take before paying it back. Other factors are your circumstances and how correct your details are. If your details are incorrectly submitted, it might take a longer time to get the cash. Now you know why it is doubly important to submit your details as correctly as they should be. 

To be eligible for the loan, you would need to be at least eighteen (18) years old, have an active checking bank account, and provide some form of valid identification and proof of income.

Smaller loans billed to be repaid over a short span of time are usually approved faster. This also goes the other way; large same-day loans will take a longer time to get approval from chosen lenders. Also, note that most lenders allow for flexibility when it comes to payments. They can allow you to select a custom repayment schedule or plan suited to you and iron out the details afterward.  

At the online loan platform HonestLoans, we go all-out to ensure you get access to the best loans when you need them in the shortest possible time. Anyone can get an emergency at any time, after all.  

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Some Types of Same-Day Loans

Below are some types of same-day loans:

  • Title Loans

These loans entail the use of one’s car (or any other type of vehicle) as collateral. The lender holds on to the vehicle’s title and lets the owner drive it around before paying back the loan. If the borrower defaults, the car is taken instead. 

Bad credit does not affect the approval of title loans. However, with the various fees that will be charged, the total cost could amount to more than 200% of the borrowed price. What’s more, you could lose your car, which would put you in more problems if it is an asset at the time. 

  • Payday Loans

These are loans one can access at offices just about anywhere or online. They are usually used to hold the fort till the next paycheck comes in. The lender usually asks for the borrower’s bank account details or a blank check during the application. Sometimes, the lender can take the amount right out of the borrower’s bank account. 

These loan types come as soon as possible, even with bad credit, but it comes at a high price, which many consider too steep. The interest rates can be very high and debt-inducing. For instance, a lender could charge $15 for every $100 borrowed, which can drive the APR to an astonishing 400% for just two weeks! Hence, it is important you have a good plan to pay back; else, you could regret it. 

Conclusion

Getting a same-day loan is always a good way to handle emergencies and unforeseen situations and pay off the ensuing debt. This is because one needs to access cash as soon as possible, as this is vital to realizing the reality of clearing debts in the fastest way possible. It’s no surprise that same-day loans are very much preferred in spite of their high costs. 

Knowing how to apply for a same-day loan is vital in certain circumstances, and this article tells you what you should know when you find yourself in those special circumstances. 

Good luck!

 

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