A quick loan is usually issued within a short amount of time and doesn’t include a rigorous approval process. It is commonly sought out by people who need to secure personal financing fast. Because the funding is not allocated for a specific purpose, you can use it for pretty much anything you want. So, why do people get them? Let’s look at some scenarios where a quick loan makes sense.
1. Emergency Expenses
Quick loans are disbursed very quickly, which makes them ideal for emergencies. According to a study on emergency savings by LendingTree, only 48 percent of people in the US can handle an emergency worth $1,000 through their savings. This means that many people would find themselves in a tough spot if, say, they had to plan an unforeseen funeral.
Unexpected expenses can arise from anywhere. Some emergency reasons for which you might make you get a loan quickly include:• Medical expenses• Auto repairs• Losing your job
A quick loan could come in handy in such situations because it would allow you to handle your emergency then repay the amount with time.
2. Personal Events
Personal events like graduations, weddings, and baby showers are near impossible to postpone, but they can put a dent in your savings. In 2019, The Knot reported that the average cost of a wedding was $28,000. Obviously, not very many couples can get their hands on this kind of money immediately.
If you are planning an event and don’t want to dip into your emergency fund or deplete your savings account, you can apply for a quick loan to cover the costs. Ultimately, you get to have the day of your dreams then pay off the amount later in affordable installments.
3. Home Remodeling
As a homeowner, you can use a quick personal loan to upgrade your home or make necessary repairs like redoing the wiring or replacing the roof. This is an excellent funding option, especially if you don’thave equity in your home and don’t want to use it as collateral. It is also an effective way to handle maintenance problems that could harm your health and safety.
Before borrowing a quick loan for home remodeling, it is important to determine whether the repairs you wish to make need immediate attention. You could apply for funding to fix:• Blocked pipe• Gas leaks• Broken air conditioning or heating systems
4. Financing a Car
A quick loan is one of the best ways to cover the cost of purchasing a new vehicle, especially when buying from a previous owner instead of from the company. This is because it eliminates the need for an auto loan, which would require you to use your car as collateral. If you default on a quick loan, you are charged some interest, but if you default on an auto loan, you lose your car. Using a quick loan to finance your car also prevents you from emptying your savings account, so win-win.
5. Paying for Vacation
According to an Experian survey, 23 percent of people applying for a personal loan wish to use it to travel. While your typical vacation might not necessitate a quick loan, something like a cruise, backpacking trip, or honeymoon could prove too much for your credit card. A quick loan could give you the graduation, anniversary, or birthday vacation of your dreams.
Now, it is important to remember that another way to go in this scenario is to save for your trip and go when you have enough money. However, a quick loan does away with the delayed gratification and is a lot easier on your credit card.
6. College Tuition
College students have a wide range of financing options available to them, including private student loans and federal student and parent loans. Still, you may consider a quick loan if:• The quick loan rate is lower than traditional student loan options• You need money to pay for short-term expenses.• Your degree program is not eligible for traditional student loan options.
Even if you qualify for a traditional student loan, college life extends beyond the lecture halls. A quick loan could help you cover short-term expenses like accommodation and food.
7. Moving Costs
Moving locally will set you back $1,250 on average, while a long-distance move could cost up to $4,890, according to Moving.com. If you don’t have that kind of money lying around, you can take out a quick loan to cover your moving expenses. This includes buying new furniture, moving your belongings, or transporting your car. You can then pay back the borrowed amount once you settle into your new home.
Final Thoughts
All in all, there is a multitude of reasons why you might take out a quick personal loan – some not even listed in this post. Whatever your motivation, it is crucial to remember that these loans – like all other forms of funding – must be paid back. Weigh your reasons to determine whether they are urgent, and if they are, get the loan, thenplan on how to repay your lender.
