In America, millions of people start their day planning expenses. It is a known fact that many Americans are living from one payday to the next. If they are lucky, perhaps from paycheck to paycheck with the prospect of growth. This means they don’t have the financial headroom for emergency expenses.
Emergencies like health care, bills, fee payments, and others can quite literally break their finances, making it impossible for them to meet other expenses. Since the iconic piggy bank does not exist for these millions of Americans, what do they break to cover these expenses?
That’s where same-day payday loans fill the gap.
When you don’t have the time to think and just enough time to react, that’s where payday loans, also referred to as same-day loans, can be instrumental in saving the day.
These short-term, unsecured loans are an excellent way for anyone to meet short-term financial commitments without worrying about pulling through the month. There are no hard credit checks, and the process is near instant.
And the best thing is that you can now apply for same-day loans online. It may, however, sound too good to be true, so let us shed some light on same-day loans.
What Is a Same-Day Loan?
Well, as the term may allude to, it is a loan you get approved for the same day you apply. They are also referred to as cash advances, payroll loans, salary loans, bad credit loans, online payday loans, instant payday loans, etc.
Regardless of what they are called, though, these tend to be approved on the same day, and the money is deposited into your account within a few hours.
However, it has to be said that same-day loans aren’t for people who need $5000 or even $4000. These are small loans ranging from $100 to $1000, depending on the lender’s policies. On top of that, you are expected to quickly repay the loan to avoid an often high-interest rate associated with them, which is the case with just about any unsecured loan.
How Does a Same-Day Loan Work?
Generally, getting a same-day loan is a quick and easy process. The borrower will start by filling out a short online application form online. They are expected to provide factual information, including their legal name, address, and information relating to their checking account.
Once the information is provided, the lender will run a quick check to verify the information, ensuring it is accurate and to see if you qualify for the terms of the loan. One of these terms is that you or the borrower needs to be employed.
However, if you apply through a service provider, the verification process will have the service match the applicant’s online profile with the best-suited lender. Then the lending company may run a soft credit check. This is unlike getting a cash advance from your credit card because even if you have bad credit, you might still be eligible for this loan. Usually, people applying for a same-day loan don’t have access to a credit card or have maxed it out.
The decision to lend is almost immediate. However, the borrower will have to provide additional information upon approval to receive final approval. You will then be asked to sign a loan agreement.
Once your request for a loan has been approved, the cash will be transferred to your checking account. While your funds may be deposited on the same day, your bank may delay the transaction for various reasons. Usually, the money deposited by the lender is accessible by the following business day.
Repaying the Same-Day Loan
Repayment terms are often strict with same-day loans. You need to repay them by the time your next paycheck arrives. Plus, repayment has to be quick. Usually, lenders will automatically withdraw the money from your bank account unless stated otherwise.
The important thing to remember is that even though getting a same-day loan is relatively easy, the money should be used wisely, and it should only be borrowed in the event of an emergency when you have nowhere else to turn to.
When Should You Apply for a Same-Day Loan?
You should think of a payday loan or same-day loan as being a sort of last resort. This means applying for it when there is an emergency, and this is the best loan you can get for the time being.
You don’t want to pull out a payday loan to buy a new purse or perhaps pay for a new suit. Apply for a payday loan if you need to pay credit card bills, emergency medical expenses, etc.
Also, be 100% certain that the loan you’re applying for is something you can financially afford to repay. That’s because the money will be withdrawn from your account the following month, which may leave an even deeper hole in your finances if not correctly managed.
Only apply for a payday loan, or any other loan for that matter, when you are absolutely sure of how you will manage repayment and the repercussions it can have on your financial stability.
The goal should be to dig yourself out of a financial hole using a same-day loan instead of going deeper into it. When used wisely, payday advances can improve your credit scores.
Why Should You Get Same-Day Cash Advance Loans?
There are a couple of reasons and circumstances under which applying for a same-day loan is a good idea. Here are a few, but we understand that there may be others, and your situation may differ from what’s listed below:
- No traditional hard checks – If you have less than stellar credit or even bad credit, you don’t want a lender running a hard credit check only to then turn your request down. That said, getting a conventional or traditional personal loan may take a few days, which isn’t helpful in an emergency. That’s when perhaps getting a same-day loan may be an alternative worth considering.
- You don’t have a credit history – America sees its fair share of migrants enter the country by the thousands each year. Not everybody may have established credit, but they may run into emergencies requiring an instant cash injection. If you have a job but no established credit, an online same-day loan can help you build that credit needed to get cheaper loan products later on.
- Same-day loans are genuinely instant – A payday loan is the fastest way to get cash when you need it the most. That’s why even people with good credit may opt for it in times of emergency.
- Everything is handled online – Applying for same-day loans can be done entirely online. You don’t need to visit a lender and spend hours pleading your case. Fill out the form and send it. The payday lender may often have this form on their website.
What Are the Minimum Requirements for Getting Same-Day Loans Online?
Getting a same-day loan online requires you to meet a lender’s minimum requirements. While these requirements may vary by lender, they generally are:
- The applicant needs to be at least 18 years old;
- They must have a steady job or source of income of which there is proof;
- The applicant must be a US citizen, which means having a social security card;
- The potential borrower needs to operate an active checking account in their name.
It is worth noting that the minimum requirements are non-negotiable. This means that if you don’t meet these requirements applying for payday advance loans will mean you get turned down.
How to Choose a Lender?
It is worth understanding that all same-day loan lenders don’t have the same policies and can’t be trusted. Just like searching for any other service, it is up to you to do your due diligence. That will include what the lender is offering, the terms of their offer, and what experience other borrowers have had with them.
The same-day loan industry has evolved dramatically in recent years on the backs of new legislation, which has almost done away with so-called predatory lending practices. However, there are a few things you will want to consider when comparing same-day loans online.
Do they offer instant funding? When you want to get money on the same day, this is something you’ll want to check and make sure it is guaranteed. Find lenders that state precisely when the loan will be given or the exact time. However, while waiting for a verdict from the lender, you will also want to gather all the required documents; this will be required before final approval.
Cost of the same-day loan. In the lending industry, a loan with the lowest ARP is the cheapest one, and this is something you should check, especially since everyone needs to repay their installment loans. However, every US state has a different set of regulations that regulate maximum loan amounts and fees. That’s why you will want to verify all the information by checking the laws of your state and even your city.
Make sure to ask the lender what terms will be outlined in the final contract, especially regarding repayment and interest rates. Presently same-day loans are available in California, Texas, Missouri, Kentucky, Florida, Oklahoma, Ohio, and Michigan.
The credibility of the lending company. You will want to take some time to check the credibility of the lending company. This is something we recommend you do even in the event of an emergency. Check their offers in advance. It is possible to find independent reviews on various websites, something that a simple Google search should reveal. If you find that many people have complained about hidden fees, it is best to move on and find another lender with fairer business practices.
Same-day loans are not new; they have been around for several years now. However, the industry has evolved dramatically, and now these loans have genuinely made it possible for anyone to get the money they need to meet urgent expenses.
The most significant challenge associated with same-day loans is no longer getting the loan, as most people will be approved for it, so as long as they are adults with full-time jobs, the challenge is to use it wisely.
Like any other loan, you do not want to borrow more than you can afford to repay. You will also want to read the contract’s fine print before signing it electronically. While it may consist of a few pages, those may detail the terms of the loan, often important information which, if you don’t think is fair, you can just as easily decline the offer. This will save you from a lot of trouble in the long term.
Frequently Asked Questions
Why should I get a payday loan over any other loan product?
There are a few positives to getting a payday loan or a same-day loan, unlike most other loan products, such as title loans. For starters, you receive money on the same day. In the event of an emergency, you don’t have time to wait for the bank or lending company to give you the loan. You may also not have the time needed to collect and scan all the documents they want. A same-day loan is quick and straightforward.
The other upside to a payday loan online is that lenders don’t require collateral. This means you don’t risk losing your car or home if you miss a few payments. Most lenders assess your creditworthiness for online loans at the time you apply for them, so there is no need to offer collateral.
Finally, even someone with bad credit can get a same-day loan. Having bad credit does not automatically disqualify you because, in some ways, it is intended for people who don’t have good credit. However, getting a same-day loan and then paying it back offers an opportunity to most people who want to build back their creditworthiness.
Are there any risks associated with getting a same-day loan?
We would be lying if we said that this is a risk-free loan. But then again, there are risks with any loan product. The risks associated with same-day loans include the following:
- The loans are often expensive, with a high-interest rate;
- These loans, if not managed correctly, can put a significant dent in your finances;
- There is no guarantee that you’ll get the money on the same day;
- You need to have a source of stable income;
- The money is automatically taken out of your checking account as soon as your salary is deposited.
Are there same-day loans that will run a hard credit check?
Yes, there are. It is worth understanding that there are two main ways for lenders to run credit checks. The first is called a soft credit check; this approach is common with payday lenders since pulling this credit information will not damage your credit history.
Some lenders in the industry may decide to run a hard credit check, often pulling it from major credit bureaus agencies like Equifax, FICO, and Experian, which may result in your credit score taking a hit.
That’s why you want to ensure that the lender does not run a hard credit check, especially if you already have a low score. Ask the lender if they will do a hard credit check before applying, especially if you want to apply for multiple payday loans.
What does a good payday loan or same-day loan look like?
A large number of lenders offering payday loans makes finding a good one challenging. However, you will want to check the following:
- ARP – The higher the Annual Percentage Rate (ARP), the more expensive the loan will be. However, the rates for same-day loans vary from around 6% to 13%.
- Fees and terms of the loan – As we mentioned many times in this article, you should understand the fees involved with the loan. Take note of early repayment fees, penalty fees, contract fees, and others. Remember that many of the costs associated with many are not clear upfront.
Additional perks – Many same-day loans online come with additional benefits that the lender may throw in to sweeten the deal. These may include easy approval on the same day, flexible repayment terms, and a few others.