Same-day loans are one of the most popular forms of credit and can be of enormous help when you find yourself in a crisis of any kind.
Smaller lending institutions are synonymous with such loans, but larger, more traditional and well-established banks will also often offer them too.
These loans can also fall under the category called payday loans – as they are the exact same product. They’re ideal for immediate emergency needs, where the usual process of applying for a loan will take far too long to resolve the problem at hand.
These loans also come in handy when you don’t qualify for a larger loan with longer terms. Same-day loans are approved quickly and easily and should be paid back around the end of the month, usually when your salary is credited to your account.
There are exceptions to these terms, of course, with some loans offering much higher amounts, and much longer, more flexible repayment terms.
Requirements to get a same-day loan
First things first, knowing what you need to qualify for the same day loan, or the size and repayment terms of your ideal loan is the first step. With a couple of easy steps, you can get a relatively accurate estimate of these features from arrange of lenders. This is helpful if need to check multiple lenders for the best deal available for you.
Before applying, however, it’s always best to get an idea of what you might need, and what the lender has on offer. So – the following are a few steps to take before you begin your online loan application.
What to do before applying for a loan
#1) Know your credit score
This is vital, as a poor credit score will often drastically change the conditions of your loan, meaning your interest rate will be higher, and your total loan cost amount higher. Often, repayment terms are much less flexible for people with poor credit as well, meaning a bad credit score can put you in a nasty spot if you’re not careful about how you deal with lenders and loaning money.
#2) Find the right lender
Knowing who you’ll be lending from and how their terms and conditions will affect you is extremely important. Make sure there are no hidden costs, flexible repayment plans and, keep an eye out for any fine print that may err on the side of detrimental to your financial situation – this loan is supposed to fix a problem, not make another one.
#3) Make sure your debt to income ratio is reasonable
Taking out a same day loan is great, but not if you can’t repay it. Knowing what portion of your salary you can do without for the monthly repayments should be your number one priority. The last thing you want is to incur extra debt and suffer more next month.
#4) Never lie to your lender about your income
The lender needs this information to be accurate and trustworthy, and you can bet they will find out about it if you try to lie to get access to a larger loan Honesty with your lenders is always important, as their job is to supply you with not only the loan you need but, an amount you can afford. The last thing any responsible lender wants is to put you further into debt.
#5) Making sure you submit a complete application
Your loan application can get rejected for something as simple as this – make sure you fill out all the required fields, submit all necessary information and be honest in your forthcomings. This can only benefit you in the process.
So, what kind of same-day loans are out there?
There are a large variety of same day loans available to you in Australia, some even just a click away, thanks to the technological age bringing finance to your fingertips. Larger, more traditional banking institutions offer short-term loans, usually for very small amounts at a decent interest rate. Going through a private broker or lender in the form of a micro-lender or peer-to-peer lending service can also be beneficial.
Same day loans can be anywhere from around as little as $250 to as much as $5,000. The amount you can get access to through your lender all depends on factors such as your credit score, your salary, and your previous dealings with the said financial institution.
Repayment terms can vary as well, with some companies expecting you to repay your loan in as little as two weeks to a month, and other companies extending a repayment term of up to an entire year.
This illustrates the flexibility of the same day loan market, and why it is so important to do a little research into, not only who you are lending from, but what they can offer you in the long and short run.
The fine print to keep an eye out for
Some companies will hide finer details in their print, often hidden costs in the form of terms and conditions you may not have noticed. While this is irregular in most responsible lenders practices, smaller, less formal financial service providers can smuggle hidden costs into their contracts, which can often be crippling if not noted and dealt with, or at least prepared for and avoided.
Always ensure that the lender you’re dealing with is honest, open and trustworthy, and operates responsibly to help you keep your financial future and well-being protected. You don’t need sleepless nights on top of any other financial troubles you may have run into.
Let’s talk about the rates
The rates that appear can include interest rates and terms, your APR and application and maintenance fees. The longer you take a loan like this out for, the more the APR will lower. The lender will still make their share of profit from the loan, but over a longer period.
In a situation where you only borrow the same amount of money for, let’s say 2 months, the APR will be much higher as the lender will need to make more money from this transaction, faster.
Let’s put it in layman’s terms
For example, if you borrow $2,500 over 61 days (2 months), your establishment fee should be around 20% with a 4% principal per month – meaning you will pay a total of $3,200 once all is said and done, with the APR being roughly 119.67%.
If you take this same $2,500 loan out over a year, your establishment fee and monthly principal will stay the same, but the APR will lower to 20%, which is a good thing, right? The answer to that question depends on if you are comfortable or not essentially buying a longer loan period, as your total repayments at the end of this year will amount to $4,200.
So while you pay $1,000 more, you also had a total of ten months further to deal with the repayments, which is quite fair and a lower monthly cost point on a month to month basis.
All in all, getting a same day loan in Australia is about finding the loan that works for you in the long run. Careful research and open communication with your lender or lenders is always a beneficial aspect to this process, and will only take you further along the road to financial success.
So no matter how badly you need to secure that emergency finance, make sure you read the fine print and consider the long term implications of this type of loan. You should only want this sort of thing to benefit you and with all the incredible, trustworthy lenders all across Australia – it won’t be too tough.