Personal Loans, What are they and if you need one
The whole loan lending industry has seen tremendous growth in the last decade. Why is that? Different researchers show that the average American has taken out at least one loan. That tendency is constantly increasing and the growth of the lending industry itself is proof of that.
The truth is that we live in a rather strange and difficult economic environment. Having a stable job and working hard may no longer be enough to keep you safe from financial trouble. The reason for taking out a loan, of course, can be various. One thing is for sure, nowadays, taking out a loan is not just common, it can even be considered as normal.
Why do people take out loans?
You may find yourself in a situation where taking out a loan makes sense for different reasons. Many people out there struggle with their monthly bills, even things like food can become a problem, especially for people who are used to eating out, instead of cooking their food. Some struggle to pay their electricity bills. The main reason for people seeking out financial assistance is, however, the unexpected financial trouble that life throws at us.
What is an emergency expense?
An emergency expense can be anything from your car breaking down on your way to work, to having to repair the roof of your house or facing a major health problem. All these expenses have one thing in common – they often catch you unprepared and always require immediate attention.
So what can you do when you have an emergency expense that you need to take care of as soon as possible, but you do not have the money to do so? Wasting time is the last thing you want to be doing when you are facing an unexpected expense. When the money in your pocket is not enough to cover your expense, you need to get help. There are different ways for people to get financial assistance.
Ways of getting financial assistance
Even though taking out a loan is the most common choice for people in such situations, it is not the only option that people normally have.
Borrowing from family and friends
Asking your friends and family to help you out may be the perfect solution to your problems. Borrowing money from a person whom you know and you are close with comes with some obvious benefits.
Unlike with a loan from a private company or a bank, where you would need to pay a significant amount of money on interest and fees, borrowing money from your family or friends would normally not include any additional costs.
However, borrowing money from your relatives is not all sunshine and rainbows, as in case you do not manage to repay the money that you have taken out within the agreed time period, you will risk damaging your relationship with the person whom you borrowed money from. Make sure to evaluate the risks before making a decision, because in many cases, a good relationship is far more valuable than paying the interest rate and fees.
Taking out a loan
Taking out a loan is, of course, the most common thing to do in a situation where you are in need of immediate cash. There are many different loan types that you can choose from. However, when you need the money fast, your options, at least the good ones, are not that many.
While a standard loan from a bank is always going to be an option worth mentioning, the truth is that nowadays, not many can actually qualify for such loan.
Another thing that makes this option unattractive to many borrowers is the speed of the application process and response time. When you are faced with an emergency expense, your back is pressed against the wall, you cannot really afford to wait weeks or even months to get a standard loan from a conventional lending institution, even if your credit score allows you to qualify for one. This is why most people seek the service of private loan lending companies that offer immediate personal loans.
Instant personal loans
This type of loans, as the name suggests, is a type of loans designed especially for people who need financial assistance and they need it fast. As we have already mentioned, most standard loans from banks will simply not work for you if you are dealing with an unexpected emergency expense. Instant personal loans allow you to get the money you need as soon as possible and take care of your financial problem.
Quick personal loans have a very fast application process with lower requirements compared to standard loans from conventional loan lending institutions. Usually, even having a bad credit will not be much of an issue and you will still be able to qualify for your fast personal loan.
Another thing that makes this loan type a go-to option when dealing with emergencies is the loan approval response time. You will know whether your loan application has been approved or not as soon as within hours after you have submitted it.
Quick personal loans are usually unsecured but if you have an asset that you can use as a collateral, you may be able to qualify for a secure immediate personal loan. Probably the most important thing when applying for such loan is your ability to repay it.
Private loan lending companies that work with borrowers who do not have stellar credit scores are mainly interested in their customer’s income and ability to repay the loan within the given time period.
It is important to mention that quick personal loans have higher interest rates and fees compared to standard loans and so you should be very careful if you are considering applying for such loan. You have to be really confident in your ability to repay the money on time, otherwise, you might fall into a debt cycle which is the last thing you want.
Calculate your budget, calculate your current and future expenses, your income, and see whether you will be able to handle repaying your personal loan or not. If the answer is negative, then you may want to start looking for some other options.