No matter how hard you try to avoid them, emergencies will pop up. Even if you plan things meticulously, to the tiniest little detail, something’s bound to come your way and ruin your mood. You may have devised a flawless financial plan for the following few months. Every expense is calculated to the cent. But sooner or later, there will be costs impossible to predict.
Having gone through hard times firsthand, many of us have savings to dip into when trouble rears its ugly head. Knowing that you’re backed up is highly comforting, even if nothing terrible happens.
Even so, not everyone manages to save a substantial amount. Before you know it, bills have piled up; you have to afford that wedding present for your best friend, and bam – money is out the window. If you’ve never considered getting a loan in the hour, there are many valid reasons to do so. Besides offering fair conditions, its primary purpose is to ease your troubles when you’re desperate for money.
Emergency loans are currently exploding around the globe. Lenders are more than familiar with all the hardships we face daily. By injecting a little fuel at the right moment, they ensure your engine won’t stop running.
A Variety of Purposes
When it comes to investments, not all of them have the same degree of urgency, far from it. Maybe you’re planning to renovate your home in the following year. Covering larger projects like this requires more than a fast emergency loan. You need to predict all expenses if you want things to go as planned.
But what if you suddenly need to cover funeral expenses? Such arrangements are costlier than you might think, and it usually slams people in the face when they least expect it. Unlike weddings, birthday parties, or similar happy occasions, it’s not exactly something you look forward to, eagerly saving money in the process. It just happens without asking first. And in times of grief, the last thing you want to do to sit down with a calculator and do the math.
You can probably think of countless other examples like this. Flooded floors or basements, roof leaks, health issues, car damage, you name it. How about some urgent business travel you need to cover personally? We can list these situations until the cows come home.
Best of all – short-term loans are approved instantly. Some call them one-hour loans or loans in the hour, and while getting it that fast is possible, it usually takes a few hours before you can access your loan. While lenders have individual approval policies, you rarely have to wait more than one business day.
If you knew how lenders process other loan applications, you’d appreciate emergency loans way more. Let’s look at mortgages for a second. Home loans like this can take ages. They involve a lot more procedures than short-term borrowings: pre-approval, finding a home, application, processing, underwriting, final approval, and closing. And if you add missing paperwork or credit disputes for some extra flavor, you suddenly start spotting unwelcome grey hairs in the mirror.
In comparison, obtaining a one-hour loan seem like a walk in the park. All you need to do is sign a few papers and meet criteria like decent income and credit score. Provided the lender gives no lending restrictions (like in most cases), you can spend it as you wish.
Common Unsecured Loans
The unsecured loan is not a single category. There are several main types tailored for the target groups. Let’s see what each has to offer.
The most requested kind is the personal loan. It varies roughly between $1,000 and $50,000, though some institutions start from $3,000 and above. This lump sum (a single payment) carries fixed rates and origination fees.
Next, we have the student loan. Since many college-age people are still financially dependent, it’s a good idea to use student loans for housing, education materials, tuition, etc. Higher education is expensive, and this loan should cover a substantial part. It differs from other types because it doesn’t affect your credit rating. But if you decide to apply for a mortgage in the future, some lenders may consider it.
The third common type is credit cards. These plastic or metal pieces allow you to borrow from a financial institution to pay for services and goods. It’s an unsecured deal: the lender trusts you to repay the money (plus interest and fees) by the billing date. You also have the secured version, where you add a security deposit to your card.
Choosing Your Lender
Choosing your financial provider takes some work. Banks usually spring to mind first, but there are private actors, too. Whatever you choose, it’s best to keep away from illegal lenders, known as loan sharks, who charge high interest and are often ruthless with repayment periods. Complying with the law should always be a priority.
There are a few essential factors when choosing your best lending option. Websites like forbrukslånpåtimen.com/ offer valuable information on this subject. Looking at the effective nominal rate will give you the total loan amount, all fees included.
If you need a low amount, it’s wiser to ask a credit union than a bank. Larger institutions might not even offer small loans, though there are always exceptions. In other words, try to match the provider to your needs.
If you’ve had any experience with lending, you already know about credit scores. Outstanding debts and defaulting mean bad credit. A perfect score is hard to achieve, but the more attention you pay to your finances, the higher the result.
The problem is that some lenders only lend if you have good credit. They stick to their principles, and there’s little you can do about it. Try finding someone to grant your request even if you have bad credit. Some lenders specialize in cases with low credit scores, so finding one would be a perfect solution. Otherwise, you’d have to put up collaterals in a secured loan scenario.
Interest rates are here to stay. There’s no circumventing that percentage in any way; that’s how banks, unions, and other lenders earn their money. Though it’s not fixed, there is a rough allowed range of how much lenders can charge you monthly.
The general rule is that short-term personal loans carry high interest. You need to check the APR (annual percentage rate.) For the average unsecured loan in the hour, the APR ranges between 6% and 35%. T
he latter number might dazzle you for a second, but considering the nature of the loan, it’s perfectly understandable why banks would charge it. After all, it’s an unsecured deal: without your assets to add security, the lender has to take all precautions. Find out more here.
Professionals vs. Friends
Borrowing money from friends can be really tricky, particularly if it’s someone close. If you fail to repay, that bond can break very easily. Even though they might say it’s not an issue, not keeping your word won’t go unnoticed. It’s best to leave it as a last option, when you’re all out of ideas.
Financial institutions are much more practical in that regard. There are no personal feelings involved. You don’t need any sweet talk or any special treatment. The bank is there to provide that exact service, so there’s no guilt involved. Plus, if you maintain a solid credit score, you become attractive to lenders in the future and they’re willing to negotiate more.
When asking for financial aid, many people become self-conscious. They might think that their sex, race, social status, or religion will affect the lender’s decision somehow. Indeed, some institutions were known for being unprofessional and biased, denying loans to candidates for no logical reason. But that’s all the past now, thanks to one single Act.
We’re talking about the Equal Credit Opportunity Act (ECOA) from 1974, when the government decided to end this nonsense once and for all. Since then, creditworthiness has been the only criterion (as it should be). Whether the person is Hispanic, Eskimo or Blasian, young or old, ginger or blonde – all that is totally irrelevant. Providing equal opportunity for every qualified borrower is a true milestone in the finance world, making things better for everyone.
Go For It
Once you’re familiar with all these details, you should feel more confident when asking for a loan. It’s no rocket science – you just need to be prudent and take more offers into consideration. Oh, and being conscientious and responsible really helps.