A same-day loan is a type of loan that is processed and disbursed on the same day as the loan application. This type of loan is typically designed to provide quick access to funds for emergency expenses or unexpected bills. Same-day loans are usually short-term and have high-interest rates.
Some popular same-day loans include payday loans, logbook loans, pawnbroker loans, cash advances, and short term loans. It’s important to consider the terms, fees, and repayment requirements before taking out a same-day loan.
What Are The Different Types Of Same-Day Loans?
There are several types of same-day loans available in the UK, including:
Payday Loans
Short-term loans with high-interest rates are typically used to cover unexpected expenses until your next paycheck. They are characterised by high-interest rates and short repayment periods, usually just a few weeks. Payday loans are often marketed as a quick and easy solution for financial emergencies, but their high-interest rates can make them an expensive form of credit. You usually need a steady income and a checking account to qualify for a payday loan.
Logbook Loans
A secured loan that uses your vehicle as collateral. You must provide the lender with the logbook, or V5 document, the official vehicle ownership record. In exchange for the logbook, the lender will provide you with a loan, typically with a high-interest rate. They are available to individuals with poor credit and offer quick access to funds.
Pawnbroker Loans
This secured loan uses valuable items such as jewellery or electronics as collateral. You can bring the items to a pawnbroker and receive a loan in exchange. The loan amount is typically a percentage of the item’s estimated value. Pawnbroker loans are usually short-term, with repayment periods of a few months. If the borrower cannot repay the loan on time, the pawnbroker may sell the collateral item to recoup their funds.
Cash Advances
Credit card loans allow you to use your credit cards to obtain cash, usually with a high-interest rate. Cash advances typically come with a high-interest rate and fees, and the loan must be repaid along with any accumulated interest and fees. Additionally, it’s important to remember that cash advances are considered a form of debt and can affect your credit score.
Short-Term Loans
Similar to payday loans but with a longer repayment period, typically over a few months. This type of loan is characterised by regular payments or instalments spread over the loan term. The interest rate and fees for short term loans vary, but they are typically higher than traditional personal loans.
The loans come with their unique features. Before taking any loan, borrowers should read and analyse the repayment rates and terms and ensure they can pay it back on time.
