When you need quick cash with little hassle, a same day personal loan is one option to consider. But just because it is convenient, you still need to give it some thought since you would be taking on more debt.
We've done the research into same day personal loans, so you can save some time. Here’s how they work.
How same day loans work
Same day personal loans, or same day cash loans, are a type of personal loan where you get the money the same day in which you apply. Typically, you can borrow up to $50,000 with a repayment period ranging from a few months to a few years.
In contrast, it may take several days to process other types of personal loan. The speed of processing varies by the lender. Large banks generally take longer for loan approvals than online-only non-bank lenders.
Who offers same day personal loans?
Same day loans are mostly offered by non-bank lenders and are generally applied and processed entirely online.
Same day lenders typically rely on algorithms to make the decision on approving your loan, speeding up the process considerably.
How fast can funds arrive?
Some non-bank lenders — such as MoneyMe and SocietyOne — may approve and transfer money into your account within hours of application or later on the same day. Conditions, such as having a bank account with a certain bank, may apply and can affect the speed at which applications are processed.
What can they be used for?
Being unsecured personal loans, you can use them for practically anything.
- Emergency costs such as medical bills and funerals that cannot be delayed.
- Unexpected car or home repairs that insurance may not cover or have delays in covering.
- Pay bills you can’t afford at the moment.
- Money to lock in the rental bond on a new home.
You do not need to get a same day loan just because you can. Here are some things to consider:
- Do you really need a loan today? Can it wait a day or a few days?
- Will taking this loan make things better or worse for you in the long term?
- Are there more affordable alternatives you can use to get your hands on quick cash?
- If you are borrowing to pay a bill, is it possible to contact your creditor (to whom you owe money) and negotiate another payment date? This is not an impossibility.
- Can you dip into your savings if you cannot buy time?
- Can you redraw from an existing personal or home loan you are ahead on? This means borrowing more on a loan you already have with some equity, but it may be faster than getting a new personal loan.
- Can you get a bank account overdraft with your bank?
There may be other alternatives that are specific to your immediate cash need:
- Overdue rent can be paid with rental arrears loans. Various grants or interest free loans are also available, if you qualify.
- A rental deposit can be met with a rental bond loan. Some may qualify for interest free, fee free loans from state governments.
- If you are thinking of borrowing to pay credit card debt, you may want to consider a debt consolidation loan or balance transfer.
Some alternatives you can consider can be worse than others.
- Borrowing from family. It may sound like a great idea, but depending on your family, it can lead to relationship problems that only add to your financial stress.
- Credit card cash advances are expensive. These typically have an interest rate of 20%+ from the day you withdraw cash.
- Payday loans also carry extremely high fees.