When you desperately need money now, you have several viable options available to get you through your emergency situation including payday loans, personal loans, vehicle title loans and pawn shops.
Do you desperately need money today?
Most loans work in a similar manner where you complete an application and online nowadays is most popular. The lender receives the application and determines your credit worthiness, risk, income and debt-to-income ratio.
They either themselves make the loan to you or broker it out to another lender depending on several factors including your credit score.
Payday loans can still help out when you are desperate
The payday loan has been around for a very long time and works in a manner that you receive cash or a loan against your future pay cheque. The fees are charged upfront and taken out of the loan amount.
The danger of these high interest loans is if you can’t pay it back within the time period of your next pay cheque you will suffer extreme roll over penalties and possible increased interest rates until the loan is paid in full.
Typically you write a post-dated cheque or an automatic withdrawal release to ensure they receive their payment on your pay day. If funds are not available when they go to claim their payment this could mean a financial spiral of doom from which it is extremely difficult to recover.
Personal loans with bad credit
Personal loans work in a similar manner but have fixed interest rates and repayment terms that may stretch over months. Again the interest rates are extremely high and more so if you have poor credit making you a higher credit risk.
The advantage of personal loans is that when you experience a desperate need for money, it is more than likely you will need more than one pay period to recover from the emergency and personal loans can be structured to give you more time to pay without amassing penalties.
Vehicle title loans are the same as payday or personal loans in that you have to apply and the rate you receive is based on your credit worthiness. The catch with title loans is you have to own your vehicle and not have any other leans on it in order for it to be used as collateral in a title loan.
The greatest risk of title loans is that if repayment is not made, your car can be impounded and sold to repay the debt, even if it is a small amount you owe compared to the value of the vehicle.
Pawn shops when you desperately need money
Finally when you desperately need money, you can turn to pawn shops. This type of lender takes collateral of unusual nature, jewellery, silver, antiques etc. and will loan money against that object, usually far below market value and with high interest rates.
You are given a specific amount of time to make repayment, including interest before your item is sold to repay the debt.
When you desperately need money, you do have options but it behoves you to do substantial research and use lenders who are upfront with their fees, APR, payments with no surprises.