Fast Loans

Financial Dictionary -> Loans -> Fast Loans

In the United States, fast loans have become increasingly popular due to their wide availability over the Internet. Fast loans are financial products that borrowers can obtain within a few minutes, hours or days. Lenders do not usually require a credit check, and many individuals see them as attractive offers. However, they must be paid off before or at the maturation date as to avoid large interest charges.

Types of Fast Loans

Fast loans come in the form of secured or unsecured loans. With the first type, the borrower has to provide collateral as to guarantee the borrowed amount. A good example of a secured fast loan is a car title loan. The borrower gets easy access to cash as soon as the car title loan company obtains the documents of the car title. No collateral is required for the unsecured type, but it comes with a higher interest rate to compensate for the bigger risk involved in case of default. In fact, many consumers consider car title loans a form of predatory lending. The Consumer Federation of America has compiled a report with car title loan issuers the public should be informed about. A payday loan is one example of a short-term instrument intended to cover one's expenses or emergency costs until the next paycheck arrives. Because of the short-term nature of this loan type, there might be a substantial difference between the effective annual rate and APR. In the Unites States, payday loans are regulated by the separate states but in 2007, the Congress passed a law that limited APR to 36 percent for loans granted to military personnel. Payday loans are considered a felony in Georgia and may involve costly law-suits. In New Mexico, borrowers who are unable to meet their financial obligations are offered a payment plan over a 130-days period. No fees or interest apply. In North Carolina, fast loan providers are required to discontinue this lending practice and only collect the principal on outstanding loans.

How to Obtain a Fast Loan

Borrowers can obtain a fast loan from companies that advertise financial services in their locality or in the online space. In order to be granted a loan, the potential borrower must be at least 18 years old, have a stable source of income, or provide collateral as a guarantee. Simply fill out a form, providing the required information. Once you have sent the form, the company confirms that the application is received. Upon approval, the provider deposits money into your account.

Pros

Fast loans can be helpful in times when cash is in short supply, and all other options have been exhausted. Fast loan offers vary greatly, from $100 to $10,000. Payday loans are usually in the amount of up to $1,500, while car title loans are bigger in value, as much as $10,000. Businesses that need cash over a short period of time can also take advantage of fast loans, bringing their finances in order.

Given that fast loans can be accessed online, borrowers can apply any time.

Cons

With interest rates of over 20 percent, fast loans can be a good source of financial troubles. It is best to borrow only the amount of cash you can pay before maturity or else, you will incur more debt.