You may have heard the term ‘consumer loan’ before and you may have taken one in the past. You may even be planning on applying for one. When you have an emergency in which you need some money to cover the expenses, a consumer loan can provide you with the extra cash you need to meet such needs.
A consumer loan is a sum of money borrowed to fulfill a wide range of consumer expenses, ranging from grocery shopping to major events like home purchases. This type of loan can be secured or unsecured. A secured one requires collateral before funds are disbursed, while an unsecured loan doesn’t require collateral. In many cases though, consumer loans will usually be unsecured.
There are several types of consumer loans you can go for and different amounts for which you can qualify. While this loan can be very helpful, if the need is immediate, requiring instant funds, then you will be better served by a same day loan. This is a type of consumer loan that can be approved and released on the same day you applied.
Now, let’s discuss some of the important documents that you may need for the application and some important steps you must follow to get this same day loan quickly.
Important Documents Needed to Get a Same Day Consumer Loan
The following are some of the items or documents you are expected to provide to the lender:
- Two identification documents such as your driver’s license, citizenship certificate, military ID card, social security card, passport, or birth certificate.
- Proof of home’s residence such as mortgage document, insurance proof (home or auto), utility bill that has your name and home address, voter’s registration card, or a real estate tax receipt.
- Proof of income such as paystubs, bank statements, tax returns, or W-2s
- Information about your employer, such as your employer’s name, the company’s name, and the name and phone number of your manager.
Steps to Take to Get a Same Day Consumer Loan
There are different reasons why you may need to apply for this credit. Whatever your reasons are if you want to get access to the borrowed money as soon as possible, here are some key steps you should follow:
Understand How Much You Need and How to Repay
The worst financial decision to make is to borrow money that you cannot pay back. A default in repayment can be detrimental to your credit report, hence the need to check your income and going for an amount that you can easily repay. Most reputable lenders make sure they run a credit check or other important checks on you to determine if you can repay a loan before offering it to you. It is important that you do a personal evaluation first before you apply. You can start by identifying the amount you need in relation to your income. This way, you will not experience any difficulty with repayment.
Check Your Credit Report
As already mentioned, most lenders run a credit check to determine whether you will repay your debt or not. A credit report shows your score based on how well you repay your debts on time. The best consumer loans require you to have a fair score of about 580 to 670. If you have a score that is above 670, you have the best chance to get a good loan with a lower interest rate.
You can ask financial credit reporting organizations for a copy of your report. They offer this for free. Check your score to see if you have a chance at getting a loan. If you have a poor score, make sure to take steps to improve it. For ways to improve this score, check here: https://www.experian.com/
Consider Your Consumer Loan Options
There are different options available to you. If you have a poor credit score, you can choose a co-signer for your loan approval. If you don’t want a cosigner or can’t find anyone to stand in for you, you might decide to go for a secured consumer loan. If both options fail, you may want to search for lenders you can borrow from without worrying about your credit score. If all options don’t work out, then you might need to take your time and build your score.
Choose Your Preferred Loan Type
Once you have deduced your credit score, the next step to take is to choose a loan that suits your situation or needs best. Some lenders will allow you to borrow money for any purpose, while others may only allow you to use the money for specific purposes. It is wise to find a lender that will borrow you some funds for the exact purpose you need them for.
Here are some reasons why you might go for your preferred type:
Debt Consolidation
This is one of the main reasons why you might need to borrow money. There are lenders that only offer loans for this purpose. Debt consolidation is when you borrow funds to cover your existing debt. By doing so, you get a new loan with a better interest and repayment plan.
Credit Card Refinancing
Some lenders will only give you cash for this. You get a new credit to pay off your existing credit card debt. Since most consumer loans have lower interest rates than credit card rates, your new loan is much better than the previous one.
Home Improvement
If you want to increase your home equity and value, you can take out a home improvement credit.
Emergency Situations
Emergencies can arise at any time. It could be a medical emergency, a car malfunction, or an urgent home repair. In this situation, you will need to get an emergency loan.
Shop for the Best Rates and Offers
Do not go for the first lender you see. Instead, shop around (online or physical) for the best interest rates and offers. Compare the rate of one lender over the other before making your decision. You can get the best offers from financial institutions, credit unions, and online lenders.
If you decide to get a loan from the bank, it is wise to discuss it with your account manager. Ask them what their rates and offers are. Even if their rates seem fair, compare them with other banks before making a choice.
Online lenders are known for their competitive rates and good offers. They also offer a pre-qualification process to borrowers to determine whether they will get a loan or not.
Choose a Lender and Apply
After comparing rates and offers, it is time to make a choice. Make sure the lender you go for has your best interest at heart. Apart from having the best offer, what is the reputation and experience of the financial service provider? Especially if you are doing business with it for the first time, this information is very necessary. You wouldn’t want to choose a financial provider with poor services and rules.
When you are sure that you have made the right choice, you can now apply for the loan. Some lenders might require you to meet at a physical office to apply, others have their application online. Different financial institutions asks for different information on its application, but generally, you are to provide your full name, home address and contact, employment and income information, purpose for taking out the loan, and how much you will like to borrow.
Provide the Right Documentation on Time
If you fail to provide all the necessary documents in a timely manner, your loan application process can be delayed or even terminated if the delay is extensive. You should have all the required documents ready and provide them on time to the lender. To make sure you have everything ready, click here for examples of some of the documents you might be asked to provide. The lender will let you know what they want from you and it’s important you give them the information on time.
Important Tips to Speed Up a Loan Application
The following are some tips that can help you get your application approved and funds released quickly:
Be Debt Free
If you have debts to pay, make sure you repay them on time. Paying off some of your debts will increase your chances of getting a loan on time.
Talk to Your Current Financial Service Provider
If you have had an account with a bank for a long-time, they are more likely to provide you credit on time without you going through rigorous credit checks.
Collect Your Funds in Person
If the lender you go for has a physical location, ask if it is possible to visit there and get your money on the same day.
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Conclusion
If you decide to take out a consumer loan, it is important you check if you can take on debt and repay it on time. Keep the steps mentioned above in mind as you choose the right lender for this.
