Quick loans can come in handy, especially if you are short on cash or need some funds for a specific purpose. They are also an excellent option for those who have good credit and a steady source of income. These types of loans have their disadvantages, however. If you take out a quick loan online but fail to pay it back at the agreed interest rate and schedule, then you will end up paying much more than the original loan amount. When you get instant loans several times over, there’s also the risk of these types of loans becoming a vicious cycle and make the repayment even more challenging. In order to know when it makes sense to apply for quick loans and when it’s best to avoid them, read on. 

What is a quick loan?

Quick loans are cash advances taken out from a lender or an online loan app or a personal loan app for unexpected financial emergencies to help you bridge a financial gap that you pay back later.

quick loan

When should you apply for quick loans?

You should consider a quick loan online only if 

  • You have a steady source of income and a good credit score 
  • You need cash quickly to cover an expense but do not have the funds
  • You will repay the loan as soon as possible with your next salary payment. 

Advantages of Quick Loans

The advantages of a quick loan are 

  • Easy to Apply – Quick loans are easy to get, as you are applying online and don’t have to go through an extensive application process.
  • Easy repayments – You set the repayment amount, interest rate, and repayment length. 
  • Quick turnaround – Fund transfer and cash advance lenders usually provide you with a loan within a couple of hours. 

When to avoid Quick Loans?

The downside of taking out a quick loan is that you could end in a financial spiral and end up paying much more than the original loan amount. Avoid quick loans under the following conditions,

  • High-interest rates – This can quickly add up to the amount that you borrow especially if you have no regular income. 
  • High risk – It can be difficult to repay the loan in a short time period if you may have an irregular income. 
  • Additional expense – There could be an additional fee, such as a processing fee or an origination fee. 
  • Higher Payment and Larger debt – You can end up with a larger debt if you take out a quick loan and have no payment solution.

Anil Sumra

Anil Sumra is a Digital Marketing Expert with more than 10 years of experience. He loves to write on various financial topics online to create financial awareness. He holds a bachelor’s degree in Finance & Management.

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