Loans

What Options Do I Have If I Need Quick Financing?

What options do I have if I need quick financing

An economic contingency requires access to rapid financing. It may happen that at some point you need immediate liquidity and do not have it, it is time to look for the best financing options that will solve the situation.

Generally, the applicant for these solutions seeks to make the processing fast and agile and for this the application process must also be. In emergency situations, the request for funding requires that a response can be obtained almost immediately. However, this immediacy has a cost, which translates into higher interest rates than in consumer-to-use loans.

Quick loans

Quick loans are those whose application, processing, and approval are made in a short period of time, usually in less than a week. In fact, there are entities that provide funding within 24 hours. This speed means that fast loans are not of high amounts (below 2,000 dollars) and that the deadlines for repayment are not.

Mini-credits

As its name suggests, mini-loans refer to small-scale financing. Normally the amount is usually between 100 dollars and 600 dollars, especially if you are a customer for the first time and if you are already a customer of the entity, do not usually exceed 1,000 dollars. In line with the reduced amount, the time for their return is also and usually does not exceed 60 days, although each entity sets its own deadlines, often also depending on the customer. The requirements for accessing a mini-credit, generally, are not usually overly strict, although the institution’s risk criteria must always be met. This type of financing is usually provided by private equity entities.

Online financing in stores

This financial solution is increasingly being implemented to finance online purchases. It is an option that is integrated within the website where you buy a product or service offered by entities. The cost of financing is around 24% APR and the maximum and minimum amount to be financed varies depending on the entity, as well as the time for its repayment. It is a quick and convenient solution as it does not require you to leave the buying process much time and at the moment you know how much you will pay for each fee as they make a simulation with the cost of the product or service.

Pre-loan

Many are clients of financial institutions who receive communications from them that they have a pre-loan. The amount of this option will depend on the customer’s profile and its relationship with the entity. The important thing here is that the entity already has the risk study done and already knows the behavior of the client, so the transaction is carried out in a faster and more comfortable way for the client.

Recommendations before funding

It is essential to understand each and every one of the conditions of financing, not only the interest rate but also whether there are commissions for opening, full or partial cancellation or if it requires the procurement of any linked product.

When comparing financing of the same type, it is important to look at the APR (equivalent annual rate) and not only at the TIN (Nominal interest rate), since the APR reflects the actual cost of the financing, including the interest rate, charges and commissions it contemplates.

In addition, it is recommended that borrowing in financing should not exceed 40% of monthly income, as well as that this type of fast financing should not be used on a recurring basis, but should be a solution for one-off situations due to its cost.

If you want more information about loans and see the different options, we recommend visiting our loan comparator and analyzing which one best fits each need.

About the author

Frank Ramos

Frank Ramos

Hello, I am a savings economist at GrayAction and an expert in personal finance. I hold a master's degree in economics from Stockholm University. I hope you will enjoy reading my articles on finance categories on the site.

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