Your Guide to Loans Immediately

Taking out loans immediately is a topic that many people talk about when they’re in a difficult financial situation. These last-minute loans are usually flexible but need to be repaid quickly. 

In this article, we discuss quick loans and the eligibility criteria you need to fulfil to take one out. You can also find out when to take out a short-term loan and when you shouldn’t take one out! 

What this article covers:

What Are Short-Term Loans? 

A short-term loan, sometimes known as a small cash loan, fast loan, or emergency loan, is a loan with a quick turnaround time, meaning you have to pay it back over a short period. 

These loans are expensive, with high fees and additional charges, so they should only be taken out if you need emergency money.

They are usually flexible, allowing people to get loans if they need cash, especially if there’s a significant unexpected expense. These people might not have a credit card or want to avoid using it. 

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Eligibility for Short-Term Loans

The eligibility criteria for short-term loans are generally more flexible when compared to other types of loans. Here are some of the eligibility criteria you’ll need to fulfil to qualify for a quick loan: 

  • You must be older than 18 years of age
  • You must be a citizen or permanent resident of Australia
  • You must possess a valid form of identification
  • You must have had a bank account for at least three months
  • You must earn a regular income of at least 350 Australian dollars a week

When to Use a Short-Term Loan 

If you want to take out a quick loan or a short-term loan, make sure you do so only in the following situations: 

  • Unexpected bill or payment that you have no other form of payment for
  • Financial emergencies like emergency medical expenses or car repairs
  • Necessary home repairs that you can’t avoid
  • Income bridges till you receive a big amount to cover something important

When to Avoid a Short-Term Loan

There are other situations where you shouldn’t take out a quick loan. Instead, it would help if you looked for a different, long-term solution to your problem. Here are some of these situations:

  • Repaying debts that you already have, as this can cause deterioration of your financial situation even farther 
  • Covering everyday necessities, as you’ll need a solution that’s more long-term to cover these recurring costs 
  • Covering payments for unnecessary expenses like holidays or paying for new cars 

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How to Compare Short-Term Loans

When choosing a short-term loan, you should compare the different options available. This ensures you’re able to find a reasonable loan that is suited to your needs. Also, check reviews about the loan and avoid applying for several because this can lead to rejections on future loans. 

Follow these tips when comparing short-term loans to find the best one for your financial situation: 

  • Check and note all rates and fees, and ensure you can cover them all efficiently. 
  • Look over loan terms to ensure they are suitable for you, as longer loan terms mean you might pay more in the long run because you’ll pay monthly fees for longer. 
  • Check how much you’ll be granted for your loan, as this will depend on your income and credit history. 
  • See whether repayments will be made weekly, bi-weekly or monthly, and calculate payments based on them. 
  • Consider turnaround times to see how long lenders will take to put the money into your account. Turnaround times can range from a few hours to days, so ensure they suit your needs. 

Risks of Short-Term Loans

Taking out short-term loans also has risks that you should consider, such as: 

Elevated Fees for Borrowing

Quick loans, or emergency cash loans with no credit check, usually have high fees to be paid along with the loan. So, before taking out one, you should ensure you can repay it. 

Short Loan Terms

Other problems associated with short-term loans are that they have to be paid back over a short period. If you don’t pay the emergency loan back in time, you might be forced to pay penalties that may be double the amount of what you borrowed.  

Bad Lenders

Another risk associated with short-term loans is bad lenders from a company that isn’t reputable. Ensure the company you borrow from is registered with ASIC to preserve your rights as a borrower. 

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Strict Loan Terms

Having terms that are strict and unable to be compromised is another problem that happens with short-term loans. Lenders might even take the funds directly from your account if you refuse to pay it by your next payday. 

They can also initiate legal proceedings against you if you refuse to repay the loan or if you can’t do so. 

Leading To More Debt

Because these loans are typically costly, they can lead to increased debt if you can’t repay them. Late payments can also lead to hefty penalties, which can lead you to be forced to take out more debts to pay them. 

Final Thoughts 

If you decide to take out loans immediately, ensure you are eligible for these short-term loans. You may take out these loans for emergency cash, such as to pay for unexpected bills or cover necessary home repairs, but keep the risks in mind. 

Avoid taking out such loans for unnecessary situations, like paying for holidays or new cars, as they aren’t sustainable on a long-term basis. You should also compare loans to choose the one best for your financial situation, as they might have different loan terms and fees. 

Was the guide helpful? Check out these extra resources to delve deeper: