Quick Loans: How to Find Fast Cash in 2019
When you need money fast, one of your options is to look for quick loans. However, you need to be careful about which lenders you trust, as some companies take advantage of your need for fast cash by offering loans with very bad terms.
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Did you know that six in 10 American households responding to a Pew survey said they’d had a surprise annual expense in the past 12 months? And the median cost of this surprise: $2,000.
This is a big problem, as a different report by the Federal Reserve revealed around 40 percent of Americans wouldn’t have enough in their checking accounts to cover a $400 emergency expense.
When you have an emergency and need money right away, you may have no choice but to seek out quick cash. After all, there are some things that can’t wait — like doctor visits due to illness or injury, car repairs on the vehicle you use to get to work, or your home heating system breaking in the winter.
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Where to Find Quick Personal Loans
The good news is that you have lots of options to find fast funding from lenders. But the bad news is that some quick loans come at very high rates and have unfavorable terms. To avoid making your financial situation worse by choosing a lender that gouges you, it’s important to understand where and how to find affordable loans that get you your money quickly.
When most people think of fast loans, they think of payday loans. And, indeed, payday loans do provide money right away. The problem is, these loans are extremely expensive, so it’s very easy to become trapped in a cycle of debt you can’t pay back.
>> Read More: How do payday loans work?
You don’t have to choose a payday loan to get money quickly — and usually, you shouldn’t. You should explore other options, including personal loans, installment loans, and peer-to-peer loans.
Quick Personal Loans and Installment Loans
Personal loans are loans issued by a financial institution such as a bank, credit union, or online lender. They have a fixed repayment timeline, and a set amount of funding is provided. Installment loans are similar; they’re short-term unsecured loans. While there are subtle differences, we’ll treat them as the same thing for this guide.
With both personal loans and installment loans, you apply with a lender and are approved for a certain amount of money at a specific interest rate and with a set repayment timeline. If you take out the loan, you make monthly payments. The amount you pay each month equals the principal and interest needed to pay the loan off in full by the end of the term. If you have a fixed rate loan, this amount never changes — but it can fluctuate if you’ve taken out a variable rate loan.
Most personal loans offering fast funding have annual percent rates from around 6% to around 36%. If you have an excellent credit history, it’s possible to get loans at lower rates. Some quick personal loans that provide fast access to cash and target people with bad credit could also have higher rates, even over 100%.
Typically, you’ll repay your personal loan over three to five years, although some loans — and especially installment loans — have shorter payment timelines. Unlike with credit cards, as you pay down your balance, you don’t get to borrow more.
If you’re interested in a quick personal loan, some of your best options include the following.
Avant
Rates (APR)
9.95% – 35.99%
Loan Terms
24 – 60 months
Loan Amounts
$2,000 – $35,000
Avant provides funds for the majority of borrowers by the next business day after applying. Here are the key terms of Avant personal loans:
- Loan amounts range from $2,000 to $35,000
- Choice of loan repayment terms between 24 and 60 months
- Loan APRs are between 9.95% and 35.99%
- You’ll pay an administrative fee, which could be as high as 4.75%.
While the interest rates are relatively reasonable, the up-front fees are high.
SoFi
Rates (APR)
5.74% – 16.49%
Loan Terms
3 – 7 years
Loan Amounts
$5,000 – $100,000
SoFi indicates you’ll receive your funds within “a few days” after your application is completed and verified. Here are the key terms of SoFi personal loans:
- Loan amounts range from $5,000 to $100,000
- Choice of loan repayment terms between three and seven years
- Loan APRs are between 7.33% and 15.49% with autopay discount
- There’s no origination or administration fee
Interest rates are reasonable, and the lack of fees makes SoFi a great choice, but you won’t get your funds the next day as you would with Avant. This is a good option if you can wait a little longer.
Best Egg
Rates (APR)
5.99% – 29.99%
Loan Terms
3 – 5 years
Loan Amounts
$2,000 – $35,000
You can apply online for a loan from Best Egg and receive funds in as little as one business day. Here are the key terms of Best Egg personal loans:
- Loan amounts range from $2,000 to $35,000
- Choice of three- or five-year repayment term
- Loan APRs are between 5.99% and 29.99%
- The origination fee ranges from 0.99% to 5.99% of the borrowed amount
The interest rate range for Best Egg has lower rates than Avant’s range, but the origination fee could be costlier.
Peer-to-Peer Loans
Peer-to-peer loans are obtained through online marketplaces that connect you with people who invest in loans. When you apply, your loan is posted and funded by these investors. The peer-to-peer lending site doesn’t directly loan you the money, but it facilitates the process and collects monthly payments to distribute to the investors. There are three primary options for peer-to-peer loans.
LendingClub
Rates (APR)
6.95% – 35.89%
Loan Terms
3 – 5 years
Loan Amounts
$1,000 – $40,000
LendingClub provides funds within seven days of accepting your loan offer. Here are the key terms of LendingClub personal loans:
- Loan amounts range from $1,000 to $40,000
- Choice of three- or five-year repayment terms
- Loan APRs are between 6.95% and 35.89%
- The origination fee ranges from 1% to 6%
A seven-day delay to receive funds means LendingClub isn’t an option when you need money the next business day.
Prosper
Rates (APR)
6.95% – 35.89%
Loan Terms
3 – 5 years
Loan Amounts
$2,000 – $40,000
Funds from Prosper personal loans are typically available within five days of accepting a loan offer.
- Loan amounts range from $2,000 to $40,000
- Choice of three- or five-year repayment term
- Loan APRs are between 6.95% to 35.99%
- The origination fee ranges from 2.4% to 5%
You’ll get your loan a little faster from Prosper than LendingClub, and the origination fee may be lower.
Peerform
Rates (APR)
5.99% – 29.99%
Loan Terms
3 – 5 years
Loan Amounts
$4,000 – $25,000
Funds are typically available in around a week from Peerform.
- Loan amounts range from $4,000 to $25,000
- Choice of three- or five-year repayment term
- Loan APRs are between 5.99% and 29.99%
- The origination fee ranges from 1% to 5%
Terms are similar to competitors, but if you can’t wait a week for funding, this may not be an option.
Payday Loans
Payday loans are the worst option for securing a loan quickly. These loans are very short-term, and you’re usually expected to repay the borrowed amount by your next paycheck.
You’ll pay a large fee for payday loans, but the approval process is fast and very easy. You may be required to give the payday lender access to your bank account or write a post-dated check that can be cashed on your payday.
Although costs may not seem too bad when you borrow, the high fees for such a short duration loan mean you effectively pay interest rates of 300% or more. Many people can’t pay back the payday loan when it’s due and so are forced to borrow again—getting further into debt.
You don’t want a payday loan unless you absolutely have a dire need for funds you can’t get any other way.
Risks of Getting Fast Loans
While getting quick loans is sometimes a necessity, there are big downsides.
First and foremost, quick loans are almost always expensive. While online lenders offering fast funding are much less costly than payday loans, their rates and terms generally aren’t as favorable as competitors not focused on providing speedy access to cash.
Quite simply, lenders know you’ll pay if you really need money now, and they also typically streamline the approval process to get you the money quickly, which creates more risk for them.
The other big risk of quick loans is that scammers know people looking for them are often desperate for money. As a result, there are lots of companies with unethical business practices that target these borrowers. These companies may charge astronomical fees, have other damaging loan terms, and may try to get you to put assets at risk (such as car title lenders that require you to use your vehicle as collateral).
If you must take out fast loans, it’s imperative you work with a reputable company. Check the Consumer Financial Protection Bureau complaint database as well as the Better Business Bureau to research options. Read the fine print carefully to look for hidden fees. Finally, make sure the APR is reasonable—APR can be a more accurate measure of how much a loan will cost because it factors in both interest and fees.
When you’re considering lenders, also find out whether they’ll conduct a soft or hard inquiry on your credit report. Many lenders allow you to find out the loan terms as well as the likelihood of approval and projected interest rate without running a hard credit check. This matters, because soft inquiries don’t impact your credit but hard inquiries do. Hard inquiries stay on your credit report for two years, and your score falls when you have too many.
Alternatives to Quick Loans
If you don’t want to take out an expensive quick loan, there are several potential alternatives to consider, each with their own pros and cons. Here are your other options.
Borrow from Friends or Family
If you have a loved one who can lend to you, this is a great option because you can get the money right away — and probably won’t have to pay interest.
However, there are some obvious downsides. You don’t want to put your family or friends into an uncomfortable situation or cause them financial hardship because they help you out. And if you can’t pay the loan back, this could damage your relationship.
If you borrow, agree up front exactly how much you’ll pay back and when. Consider getting this in writing so everyone’s on the same page.
Credit Card Cash Advances
Credit card cash advances can provide very fast access to cash if you have a card that allows one. If you call your creditor, you can usually get a PIN number to take money out of an ATM. Your card issuer may also give you cash advance checks you can deposit in your bank account.
The APR on a cash advance is usually higher than the standard rate on your credit card. It’s common to have rates around 27% or more — and many credit card companies also charge fees around 3% to 5% of the borrowed amount. Personal loans may be cheaper, but payday loans aren’t.
Maxing out your credit cards with cash advances can also affect your credit utilization ratio and hurt your credit score.
Use a Home Equity Line of Credit
If you don’t already have a home equity line of credit, this may not be an option for fast funding because it takes time to apply for. You may also have to pay big up-front costs, such as for a home appraisal.
However, if you have already been approved for a home equity line of credit and haven’t borrowed up to your limit, this is a quick and affordable way to access fast funds at a reasonable interest rate. Remember, though — you’re putting your home at risk.
Take a Loan from Your Retirement Account
Finally, if you have a 401(k) at work, your plan administrator may allow loans from it. The time it takes to receive funds varies depending upon your plan, but loan approval is typically extremely fast since you’re just borrowing your own money.
Be aware of some big downsides to this approach, though. Your money won’t be earning returns while it’s borrowed, so your retirement account balance could end up lower at retirement than if you’d left your money alone. If you have to leave your job, you may also have to pay back the loan quickly. And you pay back the loan with after-tax money but are taxed on withdrawals in retirement, so you’re taxed twice on the funds.
If you end up being unable to pay the loan back, you’ll be taxed on the borrowed amount and face a 10% penalty for early withdrawal if you’re under retirement age. So even though the costs are very low and you pay interest to yourself instead of a creditor, this is a risky way to borrow.
Bottom Line: Quick Loans Can Be Costly — But May Also Be Necessary
Quick personal loans should be reserved for emergencies where you really need money ASAP. In other circumstances, take the time to fully explore lenders and look for the lowest possible rate. You can often get a much more affordable loan if you aren’t looking for cash immediately, so don’t rush into borrowing if you don’t have to.
>> Read More: Best personal loan companies
If you do decide to get a quick loan, avoid payday loans and find personal loans, installment loans, or other loans at a lower cost—and be sure to watch out for scams, no matter what approach you take.
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