There are times in everyone’s life when they need a loan fast. An unexpected medical, car repair, home repair or school expense can catch a person off guard and throw their finances into a tailspin – but for a quick unsecured loan to make it over the rough spot. Still, just because it is an emergency does not mean a person need rush headlong into a situation without knowing what options are available and what precautions should be taken.
Your bank might be a good first line of defense at a time like this. A favorable credit score and a stable, long term relationship with your banker can see you through the short-term storm. But banks are not the stable, “cradle-to-grave” employee institutions they use to be. having a long term relationship with a particular banker is more likely to mean a few months than a few years, unless you find yourself following your banker from bank to bank in a business with a very high employee turnover.
What’s more, if your credit is suffering it is a good chance that your friendly bank will treat you like the plague when you walk in looking for a fast, short-term loan – even if you have been a customer for years. So, if you need a loan fast, the bank is not going to be able to help much – the bank is still going to crawl through your history with a fine tooth comb and seek more collateral than the face value of the loan itself – and then there is still no assurance of being approved.
Situations like this are why “payday” loan companies exist. Also known as sub-prime loan providers, they make their money lending to people with less than stellar credit who are in dire need of funds fast. They use to be called “loan sharks” because of their very high interest rates and the very low qualification standards. That moniker is not used much any more, but they still can get astronomical rates for the money they loan out.
Perhaps the only two good things about these lenders are the fact that all a person needs to qualify for a loan is a steady job and proof of income – like a few recent pay stubs from your employer- and the whole loan process can be done is less than a day, perhaps in as little as an hour.
Getting an advance of cash from your credit card is a much simpler and fast process that either of the first two options, but that interest for cash advances is usually much higher than the rate for purchases with a credit card company and, unless you demand it, they will apply your payments to the purchases first and leave the high interest cash transaction last, giving those higher rates – some as high as 30% – plenty of time to generate revenue for the credit card company.
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