Same day loans: what are those?

People increasingly more show interest in same-day loans (SDL) a.k.a. emergency same-day borrow. In this article, we’re considering financial offers of same day loan companies, what are their requirements to borrowers, and what role credit history plays in the process.

The principle of same-day loans a.k.a. overnight personal loans

SDL is any loan that is granted by a financial crediting facility to natural persons according to the US legislation. To receive one, a person is asked to fulfill a crediting application, provide documents, and sign an agreement after the approval. The decision about granting typically takes a very short time, during the same or next day as a person applies for credit. That’s why such borrowings are named ‘same-day loans’ in the first place.

Typically, these are small-amount short-term loans, which are given to people with various degrees of badness or goodness of their credit history, which is often the main factor that defines the cost of the lent money to that person (and whether it is granted at all). 

What are main requirements to get a loan same day?

There are many factors that contribute to the final decision of a lending organization whether to provide to this or that person the payday borrowing or not. These are:

• credit history (it is expressed as a score, the bigger the better)

• requested amount (typically, the money at the request as SDL is not large, $5,000 tops; that amount, however, can be bigger, up to $100,000 if the term of the payday loan allows)

• the existence of a bank account to credit money into (when approved)

• legal age of a potential borrower

• must be a US citizen/permanent resident (often, with the address in the same state where payday lending is being considered)

• must have official documents that are typically required

• must have a stable income to source the repayment.

Differences between payday and one day loans

There are payday and short-term loans, as well as there are one-day and same-day loans. In fact, these are similar and closely interconnected – that’s where the confusion comes from. Let’s withdraw this confusion.

1. Payday loans are super-short loans, typically within days or a couple of months, tops. Their amounts are tiny and regularly fall below $5,000. Often, they don’t even require a check of a person’s credit history. Also, they’re pretty expensive (typically having close to or over 100% annual interest).

2. Short-term loans are actually most widespread and they are close to what banks offer: longer term (up to 84 months), bigger amounts (up to $100,000), demand many documents, are stricter about the income of a borrower and credit history, and are typically inexpensive (from 6% annual or so).

Both those lending types can be “one-day” and “same-day”, as “one-day” and “same-day” are the commercial names of those considering the swiftness of adopting the decision to grant them. Short-term lending, however, often requires several days to be considered and adopted. Yet, all SDL are much shorter in time of adopting the lending decision than regular bank loans, which may take months. 

Most often reasons for next day loans for bad credit

There is a swarm of reasons why people want to have an SDL in the first place, which can be boiled down to:

• consolidation of all existing loans to get a better effective annual interest rate and to shrink the installment payment dates to just 1 per month

• financing immediate purchases like fixing, repairing, and upgrading house, car, or another property, vehicle, or possession

• going on vacation

• paying taxes or fines

• covering unexpected expenses

• refinance to get a better credit rating

• recreational goals.

FAQ about 24 hour loan approval

1. How do I know my credit application for best same day loans was approved?

When a potential borrower comes to receive a lent money, he or she fills in the application, leaving own contact data (phone, mail, social media contacts). They are used by employees of the facility to contact.

2. When the lent money from quick loans same day comes to my account?

After the decision to grant SDL is approved and the contract for lending is signed (which contains all basic conditions of crediting), the money comes to a bank account indicated in the lending application. Very seldom, people are given physical cash to their hands. Typically, this very same banking account is used to repay the received loan. 

3. What documents are typically demanded for same-day personal loans?

Proof of identity: Military ID, state-issued ID, birth certificate, citizenship certificate, driver’s license, passport. 

Proof of income: bank statement for an asked period, paystubs, tax returns, 1099, W-2, the contact information of the employer. Self-employed people may be additionally required business statutory documents in addition to documents showing financial flows.

Proof of address: voter registration card, utility bills, rental/purchase/leasing agreement, home insurance contract, vehicle registration, leasing, or rental document.

The exact list of required documents is established by each crediting organization individually. 

4. What is my credit score and how it affects the decision for same day loans online?

A credit score is a numeric score that shows a person’s ability to repay debts in full and on time. The more it is the better. A really good one starts with 700 points. 

5. Do same day loans have alternatives?

There are many alternatives to SDL:

1. Bank loans – much cheaper thanks to having a low rate, much more bureaucratic, mostly given to borrowers with an excellent credit history (or, at least, a good one)

2. Collateral loans – don’t require many documents, as well as income data and many personal data, as collateral itself is a guarantor of repayment of a debt. Usually, these are not given in amounts bigger than collateral, with rare exceptions. Collateral is something valuable and highly liquid: house, car, precious metals (and their products), electronics…

3. Loans that aren’t considered the same day – they’re something in between SDL and bank lending in time and conditions. The market is full of such offers, typically ranging from 6% to 100% annual interest.