There are many situations in life where you will need money faster than you can make it. When those days come, you need to be aware of the legitimate options available to you.
Loan sharks are not your only option, as there are many different types of personal loans that can help you balance the books and get back on track.
We will show 5 super quick types of personal loans, so you can figure out which one makes the most sense to you.
Payday Loans
Payday loans get a bad rap because they are very expensive, but if it’s the end of the month, you have no money left in your account and then your car breaks down, these types of loans can help you bridge the financial gap until payday comes.
The idea is that these short term loans can lend you money to help you reach the next paycheck. You then pay them back (with interest), using your next paypacket.
Some people end up falling into the loop of using payday loans to pay for payday loans, so be sure you get yourself out of the loan cycle as quickly as possible.
These loans often don’t require credit checks, which is why they are so quick to get. They are also all online, so you can apply for a loan in seconds and can often expect your loan in your account by the end of the working day. This is why many people pick payday loans when you need money right away.
The speediness and hasselless nature of a payday loan is why many people reach for them when times get tough.
Title Loans
Title loans are a type of secure loan, which means that you have to “secure” the agreement with a valuable object. This object is normally a vehicle. If you do not pay back the loan in time, the lender is then allowed to repossess your valuable object as collateral.
Unlike most other secured loans, the lender will keep the object until the loan is paid off. Another unusual quality of this secured loan is that it is more expensive than most unsecured loans.
Normally, secured loans are cheaper than unsecured ones as your collateral object is proof that you will be able to pay back the loan regardless. Title loans, however, often have an APR rate of over 100%.
The reason for this super high-interest rate is because title loans will lend you between 25% to 50% of your item’s value instead of lending you how much your credit rating says you can afford.
This means that if you have a bad credit score, you can still borrow a large amount of money. As the lender is taking a risk on you, they raise the interest to compensate for it.
Still, these loans are super quick as all you need to do is bring the object to the lender, and they will give you a contract to sign.
Pawnshop Loans
Pawnshop loans are often cheaper than payday loans, but they have a secured element to them.
With a pawnshop loan, you will get the money as soon as you make a deal in the shop. You enter with an item, and the lender will give you cash for around 50% of the item’s worth. They then give you a slip of paper that confirms the transaction and the date you need to pay the lender back.
You usually have 30 days to pay the lender back, which is why they are similar to a payday loan. However, if you don’t pay back the money by this time, the lender is allowed to sell your item as collateral.
Unlike with title loans or secured loans in a bank (like a mortgage), pawnshop lenders have customers that enter their shop every day and are super likely to buy your item. They often also have customers online. This means that they can sell your item without a problem, making the collateral part of their job just as easy as accepting a payment from you.
Usually, lenders will try to negotiate with you before it gets to this stage, as the legal process is costly and the money still takes a long time to get back to the lender, but for pawnshop lenders, it’s a quick business.
Buy Now Pay Later Loans
These loans are used by dealers, like car salespeople. Instead of buying the item in one lump sum, you instead accept a loan that lets you pay in installments.
This process is normally super quick to set up but is only available if the dealer allows it.
Like the other fast loans on this list, this process is normally expensive, and you will end up paying more money for the object than you would have without the loan; however, if you don’t have enough money to pay for it in one go, this is an excellent second option.
Credit Union
Credit Unions are the most cost-effective quick loan, as they are not-for-profit businesses created by commercial banks. The interest rates are super low and often only take a couple of days to process.
The kicker is that you normally need to have a membership with the lender before you can apply for this loan. Without this membership, you won’t have access to this cheap and quick problem solver.