Are you dealing with a financial emergency or an unexpected expense? If your answer is yes, an express loan may be the right solution for you. Express loans are personal loans that can be obtained quickly through an online platform. There are many benefits to using an express loan, although, before making a final decision on whether an express loan is right for you or not, it is crucial to gather and understand all the facts.
Can I Get An Express Loan?
When you’re in a financial emergency, an express loan can come in handy due to its fast approval process and quick funding. You can get an express loan with most online personal loan lenders and payday loan lenders. Depending on the lender and when you apply, some even provide same-day loans.
How To Get An Express Loan?
The best thing about an express loan is it’s quick, easy and can be obtained online. In addition, you don’t need to worry about opening hours, you can complete the application online in the comfort of your home. The application process is quite simple and can be summarized in six steps.
1. Determine What You Need
Determine exactly what you need the loan for, how much you need and for how long. Compare various lenders to get the best conditions possible for your unique needs.
2. Find Out If You’re Eligible
Before submitting your application, it’s important to review the minimum eligibility criteria. This doesn’t mean you’re guaranteed to get approved, but if you don’t meet the minimum requirements, you’re guaranteed not to get approved. Potential criteria are your age, residency, credit score, and employment or income.
3. Submit An Application
To complete an application, you will need some personal information and documents handy. This could include a government-issued identification, proof of income (pay stubs and bank statements), and your social insurance number. When applying, try to complete the application as early in the day as possible. Most same-day loans are only available if you apply within a certain time of the day. If you apply too late in the day, the loan may not be approved and funded within the same day but rather within the next 24 hours.
4. Get approved And Funded
Depending on the lender, approval can take a few minutes to a couple of days. However, this can be delayed if the lender is unable to verify certain information, in which case, some lenders may ask for additional documentation before giving full approval.
Once you’ve been approved, the funds will either be sent directly to your bank account or via e-transfer.
5. Make Loan Payments
Once you receive the loan you’ll be responsible for making loan payments until you don’t owe any more money to the lender. Setting up automatic payments and payment reminders is a good idea to help you stay on track.
Benefits Of An Express Loan Online
One of the main advantages to an express loan is it’s speed and convenience, however, express loans offer more than just that:
No Collateral
The majority of online loans are unsecured which means that you are not required to pledge collateral to obtain financing (click here to learn more about collateral). In the event that you default on a loan, you won’t risk losing your car, home, or other pledged assets. There will be other consequences if you default on your express loan, such as a serious hit to your credit score.
Rapid Approval Time
Nearly instantaneously an online lender can tell you whether or not you’re approved for the financing you’re applying for. In addition, all of the relevant details for your loan can be provided right away, such as your repayment period and payment amounts. Banks and other similar lenders can take a long time to get you this information.
Click here to learn about fast approval short term online loans in Canada.
Easier to Get Approved
Banks and credit unions don’t like high risk and, for the most part, they can afford to be picky. This isn’t a problem if you have great credit, but if you don’t, you’re going to have challenges getting a loan with a traditional lender. Even if you do get approved, don’t expect to get favourable terms.
On the other hand, online lenders are much more lenient with approval. If your credit score isn’t the greatest, online lenders will look at other factors related to creditworthiness. For example, an online lender may evaluate historical utility bill payments in a candidate.
Disadvantages Of An Express Loan
While express loans have numerous advantages, there are risks, such as:
Easy To Accumulate Debt
With the ease of online lending, consumers have to be wary of taking on more debt than they can handle. Banks avoid lending to individuals who already have a lot of debt because of the high risk to them so it’s hard to run into this problem with traditional lenders. Because online loans are quick to obtain, it is very easy for individuals to get into debt if they aren’t cautious.
Payday Loans
When shopping around for online express loans, you will come across payday loans often. On the outside, payday loans seem like a great deal. They’re quick, have short repayment periods, and credit checks are not mandatory to obtain financing.
While payday loans seem like a good option, they have extremely high interest rates and the short repayment period may not give you enough time to pay what you owe. Sometimes payday loans are necessary if they’re your only option, but before accepting one, be sure to read the conditions carefully and understand all the aspects of the loan.
Prevalence Of Scams
Unfortunately, with the advancement in online lending and banking, scams have become more prevalent. By applying for express financing online, you risk applying to a fraudulent company which could really hurt your finances. To avoid falling for scams, watch out for:
- Anything that seems too good to be true
- Any lender is asking for information that you feel is inappropriate
Using An Express Loan to Improve Your Credit
There are several factors that can impact your credit score for better or for worse. How effectively you perform in relation to these factors will determine whether your credit score improves or declines. Below is a summary of the common factors that can influence your credit score calculation.
- Payment history. One of the biggest factors used to determine your credit score is payment history. If you pay bills or other obligations later than 30 days, your credit score may take a hit.
- Credit utilization. This is the percentage of credit you are currently using. Credit utilization is another big factor that can affect your credit score. As a general rule of thumb, your credit utilization percentage should be 30% or less.
- Duration of credit use. The length of time you’ve had credit may impact your credit score too. Usually, the longer you’ve had credit, the better. This is because lenders have more financial history to refer to when determining your creditworthiness.
- New Credit Applications. The number of times you apply for financing can also impact your credit score because the potential lender will pull your credit report. The lower your number, the better. Keep in mind that if you pull your own credit report, it won’t have an effect on your credit score because it is considered a soft inquiry as opposed to a hard inquiry.
Bottom Line On Using An Express Loan
Performing extensive research can be a challenge when you need fast cash in an emergency, but it is a necessary step that will save you stress in the future. Just like with any type of loan or financial product, express loans do come with a certain amount of risk. So while these loans are easy and fast to obtain, it is also important to do your due diligence before applying.
