Same-Day Loans For Bad Credit

Updated: April 01, 2024 Author:

Key takeaways: Same-day loans can be extremely useful in emergencies but should only ever be used for unexpected events. They come with high interest rates and defaulting on the payment could lead to even more debt. 

    What Is A Same-Day Loan?

    A same-day loan is given to you on the same day you apply. It’s also known as an instant loan and tends to be used for emergencies and unexpected events such as a boiler breaking down or a family emergency. Same-day loans have their uses for helping out in emergencies and it can be a relief to have the option to spread the cost rather than paying one lump sum.

    What Are The Different Types Of Same-Day Loans?

    There are a few different types of same-day loans though they all tend to work similarly. They’re usually a short-term loan for a small amount of money paid back within a few weeks or months. Here are a few different types of same-day loans:

    • Payday loans: Payday loans are designed to help with unexpected payments and are usually repaid in your next pay cycle. Payday loans tend to come with high interest and fees and lenders usually prefer them to be repaid with continuous repayment authority (CPA) meaning they can take the money directly out of your bank account. 
    • Pawnshop loans: Not a popular choice but one that some people use is a pawnshop loan where you offer something valuable such as jewellery or electronics in exchange for cash. The item you exchange is held as collateral until you pay back the money you borrowed.
    • Title loan: A title loan uses your car as collateral. You can still use the car however if you default on the loan repayment then your car can be taken off you. Title loans also tend to come with a high interest rate and if you lose your car it can lead to more money problems with your job etc. 
    • Credit card cash advance: If you have a credit card and you aren’t near your credit limit then you may be able to get a credit card cash advance which would give you money instantly. However, cash advances usually start accruing interest straight away.

    Who Can Get A Same-Day Loan?

    Different lenders have different criteria but a lot of same-day loans are suitable for people with bad credit. This is because the checks aren’t as stringent as with other loan products and because the loan is only taken out over a very short period of time, your credit history doesn’t matter as much. If you have bad credit it might be worth looking for a lender who specialises in bad credit same-day loans. It’s worth noting though that if you do have bad credit, you may be hit with even higher interest rates on your loan. Most lenders will want proof of address, proof that you receive a regular income and bank account and debit card details. You also must be over the age of 18 to get a same-day loan. 

    Advantages Of Same-Day Loans

    As with any financial product, same-day loans have their pros and cons and it’s important to look at both to work out if a same-day loan is right for you.

    Here are 3 advantages to a same-day loan:

    • Easy to apply for: If you’ve found yourself with a financial emergency, the last thing you want to be dealing with is a long-winded application for a loan. Same-day loans are typically easier to apply for than other loans as there aren’t as many checks to go through. 
    • Suitable for people with bad credit: Same-day loans are ideal for people with bad credit even if you’ve been rejected by your bank for a loan. Same-day loans are usually only taken out over a short period of time so lenders aren’t as interested in your financial past as a bank would be, as long as they can see that you have the ability to repay the loan. Some lenders specialise in bad credit loans so are willing to accept different circumstances.
    • No restrictions: There are no restrictions on what a same-day loan can be used for but given their high interest rates they should only ever be used for emergencies. It’s not a quick way to get cash for anything but same-day loans can help you out in a tough situation. As long as you can pay the loan back on time then same-day loans can be life savers in tough times.

    Disadvantages Of Same-Day Loans

    Same-day loans do have their disadvantages though and taking out a same-day loan with bad credit is never a decision that should be taken lightly. 

    Here are 3 disadvantages to same-day loans:

    • Easy to get into debt: Same-day loans typically have very short repayment terms however the amount of interest they accrue in that time is very high. It’s easy for people to get caught in a cycle of debt if they can’t pay back a same-day loan. As interest and fees mount it can be tempting to take out another loan to pay back the first loan.
    • Can look bad on a credit check: Even if you pay a same-day loan back on time with no issues, some traditional lenders don’t like to see things such as payday loans on your credit history and you could be denied things like a mortgage. Not all lenders will have this approach but it’s something to keep in mind for your future.
    • Little time to budget: Same-day loans are usually paid back within a few weeks or months. This gives you very little time to plan and budget especially when you’re dealing with high interest rates. So while a same-day loan does initially take the pressure off with a financial emergency you don’t have very long to get back on track. 

    Alternatives To Same-Day Loans

    If you think a same-day loan might not be right for you then try looking for an alternative.

    Asking for help from family or friends is never easy but it eases the pressure and you won’t be laned with high interest rates. You should always make sure you can pay them back in a timely manner to avoid disagreements.

    Using a credit card or an overdraft could also be a cheaper option, especially if you can pay the money back quickly. Most credit cards will have a 30 day period before you start paying interest and arranged overdrafts can be useful in emergencies. Just make sure you pay everything back on time to avoid debt.