Quick Loans Guide 2021: Lenders, Pros and Cons, How to Apply
When you’re in a pinch and looking for a quick loan, you may come face-to-face with a variety of lenders offering payday, auto title, and high interest rate installment loans hidden under a different name. Though their lax requirements and fast funding may be tempting, there are often better, more affordable options available that match your borrowing needs.
What Is a Quick Loan?
A quick loan is a loan that offers approval and funding within a few days of application, sometimes as fast as the same day. Though they can come in all types of loans-like personal, auto, secured, and unsecured, to name a few-when you search for quick loans online, the results may make you think that it’s a specific type, when in reality the term “quick” is simply describing how fast the loan can get approved and deposited into your account.
Because of this, it’s important to be wary, as lenders advertising quick loans, fast loans, or fast cash are often offering loans with high interest rates, no credit checks, or intentionally easy eligibility requirements. In other words, quick loans offer immediate gratification, but can be detrimental to your financial situation down the line. That’s not to say getting a loan quickly isn’t possible. With a little research, you can weed out any advanced fee loan scams from the legitimate lenders and find a loan that suits your financial needs.
How Is a Quick Loan Different from a Personal Loan?
Quick loans refer to how fast a loan is approved and deposited into your account-they are not a specific type of loan. That being said, depending on the speed in which a personal loan is approved and deposited, a personal loan is often very fast and easy to get once you fit the personal loan eligibility criteria. And while there are several loans that can fall into the “quick loan” category-including payday loans, refinanced personal loans, auto title loans, and even pawn shop loans-personal loans tend to be the best option when it comes to overall costs.
Ironically, lenders that advertise quick loans online won’t necessarily get you money faster than other lenders. While loans advertised as “quick loans” are often easier to qualify for and can lead to faster application processing, you may still need to wait several business days for a bank transfer.
Why Are Quick Loans Necessary?
People usually search for quick loans because they need money for an immediate emergency and don’t realize better alternatives exist. Some loans advertised as “quick loans” generally come with high fees and interest rates, short repayment terms, and the resulting high annual percentage rates (APRs). They’re often a last resort, but there are more cost-effective solutions out there if you know where to look.
- Emergency medical expenses. Accidents happen without warning, and you may need money to pay for medical bills for yourself or a loved one. (Note: they may not advertise it and might send you a bill, but nonprofit healthcare providers, including hospitals and clinics, may offer free or discounted services to low-income patients).
- Household bills. Sometimes bills stack up, and you need extra money to stock the fridge and cover rent, utilities, phone, insurance, or other necessities.
- Car repairs. A broken-down car can be a time-sensitive emergency, particularly if you need your car to get to work.
- Home repairs. Some household problems, like a leaky roof, can lead to more costly repairs or dangerous living conditions and may need to be fixed immediately.
These reasons are common and understandable. But rather than searching for quick loans, a personal loan from a reputable lender could save you money (and be a safer bet) in the long run.