How Practical Are Quick Loans for Emergencies?
If you want to borrow funds when the demand for unforeseen financial emergencies come up, quick loans may be the easiest way to get it. But, the question is—considering the interest rates, and fees and the fact that you will be borrowing against your future income, is a quick loan a practical option?
What is a quick loan?
It is a type of short-term loan that helps you gain access to cash in the quickest way possible. Quick loans help you obtain immediate financial relief, takes care of the problem of financial shortage as soon as you can and at the point of time when you may be struggling with finding instant cash.
The short term loans category also provide better terms and condition, same day approval and quick deposits than most types of loans. Even those with bad credit history can efficiently grab quick money to handle emergency situations and to cover short term money commitments.
What are the eligibility conditions?
All borrowers must be of legal age, with a valid and active bank account, hopefully in a reputed bank and has a monthly salary which is enough to cover living expenses and debt repayments. Most lenders set an income bracket and others require permanent employment. But there are specialized lenders that accept applications from borrowers with unstable income.
When the lender approves your application, you can obtain funds up to the amount that you qualified for. The lender has a way of determining whether you can repay a certain amount of loan or not. So, be careful when dealing with lenders who promise huge amounts of loan despite your income. You need to repay the loan amount h along with its interest in a short and easy time period which can range from a few weeks to a few months. Brace yourself for higher interests because of its short term nature.
Though it is a lot lesser than what you would have to pay in interest for long-term loans, the loan may get more costly if you don’t pay it on time because of penalties and fees. There is no need for you to stand in a long queue of banks and other lending institutions to have an in-depth conversation with the loan officer about the terms and conditions of the quick loan. With just a few clicks on your computer, you can study the information provided by the lending institutions online, right at the convenience of your office or home.
What should I look for in a quick loan provider?
There is a very stiff competition among online lenders as almost everyone offers quick and easy approval, low documentation and quick deposits of loan proceeds. But, it is important to be extra cautious when signing away your future income.
- Look into the overall cost of the loan. If the interests are too low, watch out for hidden charges and additional fees which may be carefully hidden in the terms and conditions. Make sure that you choose one which offers the most suitable deal at the most affordable rate.
- Check the company profile. Has it been operating legally without any serious complaints against it? Look for a reliable lender that will not share your personal details with anyone nor use it for fraudulent ways.
How can I use my quick loans wisely?
- First, create a budget, you may be too eager to repay a credit card debt, pay medical bills or settle your utility bills. But, if you don’t create a budget, there is a huge chance that you may get side-tracked. Having quick access to cash without enough time to think about what you will do to maximize it, won’t help you establish your finances.
A quick loan can help you address your short term needs and wants like tuition fees, medical expenses, birthday party, additional working capital or car repair. It is so flexible that some people forget that getting it is a huge opportunity to improve their finances. So, before you get too excited with the loan proceeds, think about the things you can do to make sure that the interest you will pay on the loan is worth it.
- Second, avoid getting another quick loan until you paid the first one. Otherwise, you will kick start a vicious cycle of debt and that will be a very difficult situation to get over with. While so many people thrive in getting quick cash to pay for inventories or suppliers, and some to simply boost cash flow until their income improves, it takes discipline not to overspend. If your income is low, and you have more liabilities than cash, check if there are ways for you to boost your income, either by getting a job, accepting additional projects or starting a business and other wealth generating activities.