What are the options when you need a loan urgently?

Emergencies can show up out of the blue. Not always will you be lucky to have enough savings to fall back on. Thankfully, there are some loan options you can turn to. Since you need money quickly, you would like to apply for those which are processed without further ado.

It can be hard to find the best solution when there is a lot of misinformation about loans. Many people try to get a loan in five minutes. But unfortunately, they end up being in the red.

Although lenders are responsible for loaning you only when you can manage payments, you cannot get away with your responsibility of assessing your financial situation.

Here are some of the best options when you need a loan urgently:

• Payday loans

A payday loan in the UK from a direct lender comes with instant approval. These loans do not run a credit check, so you can call them payday loans with no credit check too. As a lender does not make “hard inquiries” on your report, it saves a lot of time in approving the loan.

Further, you do not have to fear losing your credit points. Payday loans are generally famous among those borrowers who cannot afford to have new inquiries on their report. This is because it can push them to the category of “very bad credit” borrowers.

• Payday loans can be extremely expensive. In some cases, the APR can be as high as 1500%.
• The money is required to be paid back in a lump sum on the next payday.
• The repayment length is usually no longer than 14 days.
• You may fall into debt if you do not borrow sensibly.

It is always suggested that you do proper research before taking out a loan. Borrow money from a reputed direct lender. Analyse your repaying capacity before applying for a payday loan.

• Doorstep loans

Doorstep loans are a type of payday loan. When these loans are offered at your doorstep, they are called doorstep loans. These loans also work the same way, with the only difference being that you will get money from the representative of the lender in the comfort of your house.

Doorstep service is offered to the retired, the unemployed and the disabled. This service has been initiated to make borrowing money easier for such people. The same representative will call on your house to collect the payment on the due date.

• The PAR and interest rates of these loans could be very high.
• The payments will be collected either weekly or in a lump sum.
• You will likely end up paying back three to four times the original amount.

Doorstep loans can be very expensive, so it is essential that you take out these loans only when you are sure about your repaying capacity.

• Same day loans

Same-day loans, as the name suggests, are a type of loan that you will get the same day. These loans are also aimed at funding unforeseen expenses. The processing time is not too long so you can get money directly in your bank account this instant.

The best part about these loans is that they involve a soft credit check. A lender will peruse your credit report. However, no hard inquiries will be shown on your credit report.

• The same-day loans carry lower interest rates than payday loans.
• Depending on the lender’s policy, these loans may be paid off in instalments or in a lump sum.
• These loans require minimal documentation, so borrowing money is not a hassle.

Same-day loans have been designed to help tide you over when you are in a tight spot. Do not use these loans to cover recurring expenses.

• No guarantor loans

No guarantor loans are also small emergency loans approved instantly. These loans are also aimed at bad credit borrowers. A lender may be reluctant to loan you in case of a poor credit score. They may ask you to arrange a guarantor with a good credit score.

However, it is not so easy to arrange a guarantor with a good credit score in a short time. Further, most people avoid acting as a guarantor because your default can also affect their credit score.

• No guarantor loans do not require you to arrange a guarantor.
• You also do not need collateral to qualify for a loan.
• These loans are more affordable than payday loans.
• They will let you borrow a larger sum than payday loans and doorstep loans.
• The debt will be paid off in monthly instalments if the borrowing sum is large.

No guarantor loans should also be applied only when you need money to fund unforeseen expenses.

• Bad credit loans

Bad credit loans from a direct lender can also be disbursed the same day you put in the loan application. However, these loans are quite different from the aforementioned loans.

Bad credit loans may be used for both planned and unforeseen expenses. The best part of these loans is that they help improve your credit score. Your timely payments will be reported to credit reference agencies.

• Bad credit loans carry slightly higher interest rates, but they are more affordable than payday loans.
• They are also available in the form of credit builder loans, helpful for building credit history from scratch.

The final word

When you need money for emergencies, you will certainly want to apply for a loan that is approved instantly. Payday loans, doorstep loans, same-day loans and no guarantor loans are processed too fast.

It is worth noting that these loans cannot help build your credit score as payments are not reported to credit bureaus. However, they may ding your credit points if you make a default.

Bad credit loans might be a suitable option if you also want to up your credit rating. Before applying for a loan, ensure you do not struggle with the debt.