Fast Loans, not a Good Option

by : Aisha Cristal

Michael Collingwood was stunned, when the doctors asked him to bring immediate cash for his son's operation. His son was admitted after meeting with an accident and there existed an urgent need of money. It was then someone told him about availing financial assistance from any banking institution. But every loan to avail required a time, that Collingwood didn't had to spare. It was then he came across another option, through which financial assistance was available in just a couple of days. His son is now out of danger. Thanks to the loan that was available so easy at the needy time.

Have you ever faced such a situation, when there was no finance available at the most needy time, but suddenly got support as loans came on the way in such fast pace.

Availing financial support or monetary assistance in the shape of secured loan, will take at least two weeks, which in most cases is a long period. But there are options of easy cash in the case of unsecured loan. Here you have to just submit the valid relevant documents and loan is available in two days, maximum a week making things more easy and simple.

But the question arises is, whether there exist anything called fast loans. As per the claims by various financial institutions, the financial assistance is availed at a much faster rate. Yes, it is obviously true that, it is much faster than any secured loan. But isn't a week's time a bit long (two days as per company's claim is almost a fantasy) to call it a faster one.

Interest Rates

The interest rates for the financial assistance rendered in less than week's time will also be much higher than secured loans. For example, say the amount availed through the loan is ? 22,000 at an interest rate of 13.5%, requiring to be repaid after a period of 5 years, it may require ?506 to be paid per repayment. So, you may end up paying more than ? 30,000, of which ?8,300 comes the interest alone.

But the same amount if taken as a unsecured loan for an interest rate of 19.9%, the total amount may reach ? 35,000, of which ?581 falling as payment per month, interest alone reaching ?13,800. This comparison is enough to understand the financial liability the loan available at a fast rate will be putting on your shoulder.

Opting for finance at a fast rate through this loan facility may seem to be easy and simple, but calculate the repayments and interest rates before going for it to make yourself free from additional burdens.