If you find yourself in an unexpected situation where a surprise bill or expense pops up and you need some extra cash to deal with it, then chances are you will need to apply for a loan. This is especially true if you don’t have enough savings stored away and the financial emergency needs to be dealt with quickly, e.g., car repair, medical fees, or a utility bill.
However, most traditional lending institutions like banks or credit unions tend to process loan requests over several days, which can be inconvenient. Luckily, you can find good quick loan lenders on CocoLoan, and they are often able to process your funds within the same day of approval.
As such, we are going to dive deeper into these types of loans, how to apply for them, and much more, in order to ensure that you are better informed on what to do the next time a financial crisis hits.
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What Types of Quick Loans Can I Get?
There are a wide variety of quick loans that you can apply for, and each one comes with its own unique terms and conditions to consider. Some of the most common types include:
#1. Personal Quick Loan:
A personal quick loan is an unsecured loan that you can apply for without putting up any collateral in the process. These loans can be reviewed within hours of submitting your loan application, and the funds can be disbursed within 24 hours.
They can also be applied for online, with Sarah Ross, the co-founder of CocoLoan, going on to add, “Personal quick loans are a fast and efficient option for borrowers that need funding but don’t want to deal with the bureaucracies and delays that often come with applying for funding at banks or credit unions.”
However, do keep in mind that the interest rates and terms offered by online lenders for these loans will often vary depending on your credit score. In other words, the lower your credit rating is, the higher the interest rate offered will likely be, and vice versa.
#2. Quick No Credit Loan:
A quick no credit check loan is specifically designed to cater to individuals with a less-than-stellar credit rating. As a result, they typically have very lax eligibility requirements that allow any borrower to apply for funding, no matter how poor their credit score may be.
These loans can also be approved in a matter of hours, with the funds deposited in your checking account by the end of the day. However, the downside with these loans is that, while they are easily accessible, they often come with extremely high-interest rates and short repayment terms, due to the increased level of risk to the lender.
#3. Credit Card Cash Advance:
Credit card cash advances are a type of quick loan that can be borrowed from your card issuer against your card’s line of credit.
The benefit of this option is that you can access the cash you need with minimal effort, and approval usually doesn’t take longer than a few hours or less. In fact, all you need to successfully qualify is to own a credit card and have a good repayment history.
However, the drawback of these loans is that they come with hefty fees that will often be roughly 3%-5% of the total amount that you request. In addition, you can usually expect to be charged interest from the instant you withdraw a cash advance.
Factors To Consider When Borrowing A Quick Loan
Before you decide to take out a quick loan online, there are a few important factors that you need to take into consideration. For starters, your main priority when applying for funding is to secure an interest rate that allows you to make affordable monthly payments.
This means taking the time to evaluate your monthly budget to see whether or not you can actually afford to take on the loan and still manage to pay your usual monthly expenses. Something else to consider is that while quick loans tend to come with shorter repayment terms, you also have the option of extending the repayment period.
The good news is that this will lower your monthly payments considerably, which should give you more room in your monthly budget to work with. However, the downside of extending the repayment period is that it will raise the overall cost of your loan.
In addition, most quick loans tend to come with high late fees, so if you fail to repay your loan on time, you could be faced with very hefty fees. On top of that, failure to pay your loan on time may also result in the lender reporting you to the relevant credit bureaus.
If this happens, your credit score could be significantly lowered, thereby making it harder for you to secure funding as a result. It is for this reason that, if you find out later that you may be unable to meet your next repayment, you should reach out to the lender immediately.
Some lenders may be willing to provide you with a grace period or even renegotiate the terms of your loan agreement. This is often the best way to avoid any further action being taken against you.
How to Apply For A Quick Loan?
While the application process tends to vary depending on the lender or marketplace, here are the typical steps that you can expect to take when applying for a quick loan online:
Step 1: Evaluate your budget.
As mentioned before, quick loans tend to come with high-interest rates, so it is often best to take your time to evaluate your budget first before you decide to sign on the dotted line. This will allow you to figure out exactly how much you can afford to borrow as well as what the maximum monthly repayments should be.
Step 2: Compare lenders.
You can often use online loan broker sites like CocoLoan to instantly compare loan offers to find the most favorable rates and terms. All you need to get started is to head to the homepage, select your desired loan amount, and submit the only pre-approval form. During this part of the process, a soft credit check will be carried out on your loan application to verify your credit history.
The good news is that it will not show up on your credit report, so you don’t have to worry about it lowering your credit score. This will allow you to pre-qualify with the lenders in their network and allow you to review loan offers until you find the one that best suits your current budget and requirements.
Step 3: Sign your loan agreement
Once you’ve found the perfect loan offer, all you have to do is e-sign the loan agreement, and the lender will start processing your loan request. Most of the time, you can expect quick loans to be disbursed by the end of the day, but keep in mind that this can sometimes vary depending on the day you request the loan, as well as your bank’s processing times.
After this, it is simply a question of making sure that you repay the loan on time, as per the agreement. A good rule of thumb is to set up autopay, which will allow the lender to deduct the money owed each month on the scheduled date, which will ensure that you don’t miss any payments and incur any late fees.