It happens. You are between payment periods and need money for an urgent expense. If you need cash on the spot, you may want to consider a loan. There are various different types of loans, so it can be confusing to determine which one is best for you.
Here are three helpful ways to get fast loans.
1. Personal Bank Loan
You may be able to ask your bank or credit union for a personal loan to cover some of your current expenses. Whether you want to consolidate your debt, pay for a new car, or pay for an emergency expense, a personal loan can help provide you with the funds you need quickly.
Fast loans like personal loans are typically unsecured, meaning they are not backed by putting something like your house up as collateral. Loan amounts may vary depending on your bank or credit union, but most personal bank loans range anywhere from $1,000 to $100,000 to cover a wide variety of expenses.
To qualify for a loan, you'll need to submit basic personal information including your identification, current address, and proof of income. Personal loans rely heavily on your credit score, so if you have good credit, you may qualify for a loan with a lower interest rate compared to other quick loans. The interest rate for personal loans usually ranges anywhere from 13% to 30%.
2. Peer-to-Peer Lending
Another quick loan option is a peer-to-peer loan. Peer-to-peer lending has been around since 2005 and it's convenient because everything is handled exclusively online. Platforms like Prosper and Lending Club allow investors to offer loans to borrowers for a win-win process.
The investor earns money from the interest charged for the loan and the borrower receives cash fast and pays back the loan within flexible terms. Loan applications are approved quickly and funds are disbursed to qualified borrowers within 3 to 5 days or less.
Interest rates are based on your creditworthiness and borrowers with excellent credit scores can enjoy rates as low as 5.99% with the Lending Club. If your credit is average or low, peer-to-peer lending still offers lower interest rates than typical payday loans, but you will need to find an investor who doesn't believe you are too risky for a loan.
If anything, you may get approved for a loan (though it is not guaranteed) with a lower credit score, but you coulhave a higher interest rate to make up for that risk, like 30% for example.
Which Option Is Best for You?
All of these options can put cash in your hand or bank account in just a few days or sometimes even a few hours. The process goes smoother and much quicker if you submit all your application materials in a timely manner.
When determining which loan option will work best for you, consider your current situation and credit profile. Also, factor in how much money you need since the higher your loan amount is, the more you could be paying back interest and the longer your term may need to be. Other fees, like the loan origination fee and processing fee, should be examined and compared beforehand. Peer-to-peer lending is not available in every state, so this may not be a valid option for you depending on where you live.
As with all loans, having a great credit score will pay off and it will be a huge deciding factor when choosing the right loan. If your credit score is average, you should consider a peer-to-peer loan or a personal loan before taking out a payday loan.