Life happens and sometimes we need to get a cash loan quickly and efficiently. Whether it’s an unexpected bill that pops up, a medical issue, or a home emergency it can be hard to get your hands on the money you need when you need it. Charging a large amount to your credit card because you don’t have the cash to cover the expense is dangerous, so if you need cash fast then a small short term loan from a private lender is your best bet.
When dealing with a private lender you should expect the same level of professionalism and courtesy that you would expect from a more traditional lending institution like a bank. But there is one huge advantage to choosing a private lender; the process is on average significantly quicker (and not to mention easier). When you work with a private lender to get a quick loan you’re essentially cutting out the middle man, which means less paperwork and less waiting around for everyone to discuss and make up their minds. Not only is the process of getting a loan from a private lender quicker, but it’s also much more convenient for you. More often than not when you’re looking to get a quick cash loan you can complete a majority of the process online and from the comfort of your own home.
Payday loans are small short-term loans that you have to pay back by your next payday. Most payday lenders provide loans between $50 – $1,500, with an APR of up to 500%. These loans are very expensive and are usually paid back with one single payment within 14 days.
Personal loans are repaid in installments over a period of time, usually between 3 to 120 months. The amount borrowed can range between $500 and $50,000 depending on the lender and your financial profile. Personal loans are more preferable than payday loans because they provide you more time to repay the loan and have a much lower APR (2.99% – 46.96%).
A car title loan is a loan that is secured by your car. Meaning, if you default on your payments, the lender has the right to seize your car as payment. A car title loan allows you to borrow money against the value of your car, so you cannot borrow an amount that exceeds the value of your car. While these loans are easy to get approved for because they are secured, they are often more expensive.
If you decide to work with a private lender, you should be aware of not just the pros but the cons that come with working with a non-traditional lender.
Like traditional lenders, private lenders look at your credit score and credit history to determine your credibility as a borrower. However, depending on the lender you choose and the type of loan you want and how much, other factors may be looked at including income, employment stability, debt-to-income ratio and more. Similarly, depending on which lender you choose, each of these factors will vary in significance. Some lenders, in particular, bad credit lenders don’t put much emphasis on credit scores. Rather they base the creditworthiness of a borrower based on income and other financial aspects like debt-to-income ratio and employment stability. So, when applying for a loan be sure to consider if you meet the requirements of the lender you are applying with to increase your chances of approval.
In general, when applying for a loan with a private lender, you’ll have to provide documents to prove your identity and income. Here is a basic checklist of what you’ll need when applying for a personal loan.
Unfortunately, when looking for loans online with quick approval you’ll inevitably come across a few predatory payday lenders. These types of lenders are looking to take advantage of people who need cash fast. And while we can see why this might be appealing to some people, especially those in desperate situations, you could end up stuck in the payday loan cycle for a very long time.
Payday lenders draw in people who need same day cash loans because of debts they might have or emergencies they’re currently experiencing. Once a payday lender gets you to accept one loan from them they’ve more often than not trapped you in the payday loan cycle, this means you’ll need to get another payday loan to pay off the first one. This could go on for weeks, months or even years and it will be extremely hard to break the cycle. So before you decide to get a payday loan, look into your other options like a short term instalment loan that will be easier to handle and more affordable.
If you’re in need of some fast cash but want to stay far away from predatory payday lenders then you should consider a small personal loan from Loans Canada. The application process is quick and easy and you’ll be able to speak with one of our loan professionals within a day. Start the application process today and be one step closer to getting the money you need.
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Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.
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