Quick Loan Funding

People who need money fast can get quick loan funding, also called hard money financing. People who have a history of delinquencies, foreclosures or car repossessions can acquire funds quickly through payday lenders or same day lending institutions. If a person has a low credit score or a history poor financial decisions, obtaining a traditional loan may not be impossible. However, a trip to the emergency room, an unexpected car repair or a higher than normal electric bill will not wait for the individual to clean up his credit score. That could take years. Ideally, someone who has had a bankruptcy or foreclosure would want to avoid new debts until their negative financial reports have been improved. However, if acquiring quick loan funding is the only way to pay the outstanding bills, then same day lenders can give this person a hand and help him make ends meet.

Pay day lending institutions are ideal, because they require less financial information and will lend money to people who cannot get standard loans through a bank or credit union. All lending institutions ask for some sort of collateral to lend cash or cash equivalent. Car dealerships and banks offer finance packages that collateralize the car or the house. This means that the borrower's house acts like a promise that they will pay off the loan. If the borrower fails to pay off the loan, the lending institution will take the house back and sell it to someone else. The credit institutions do this to recoup the money they loaned in the first place. In the same way, the car dealerships will repossess the borrower's car if she does not pay the monthly payments. The interest they charge is like a fee for lending the money, when the buyer did not have it for the purchase. Quick loan funding works somewhat differently than these conventional types of financing.

Same day lending is obviously financing that can be processed in twenty four hours. The borrower will first fill out an application for financing. This application will not ask for a credit report, because many people who seek same day lending have poor scores. The lender will ask for proof of employment and salary to get a good idea of whether or not the borrower can make the monthly payments. A contract will be written stating that the lender can garnish the payments from the borrower's account if unpaid, and that the borrower agrees to the amount of the monthly payments. The borrower has to sign a contractual agreement, or the lender will simply deny his application for financing.

Same day loans are usually secured with the title of a car, a pending income tax return or the expectation of a paycheck. When a car title is used for collateral, the borrower has to show proof of ownership to the lender. In the event that the financing should go unpaid by the borrower, the quick loan funding agency will repossess the car. The financing will not exceed the market value of the car. When the promise of a paycheck is used as security, the borrower will submit at least three months of paystubs to prove the average amount of income for each pay period. These types of loans are especially helpful when a car breaks down or a medical emergency occurs between two pay periods. If an individual only gets paid once a month, waiting twenty days to get their car from the mechanic just is not realistic. The borrower would have to lose his job or get quick loan funding. Showing pay stubs and having cash in their checking account the next day, makes it possible for the borrower to return to work the next day and continue his life as before.

Using a future income tax return to secure quick loan funding is pretty common. Should a landlord say that he is going to evict the renter in January, an individual may simply not have enough time to wait until March for her income tax return. This is when the same day lenders can help her out of a financial bind by lending the money before the income tax return comes in. These kinds of loans are getting fewer, as electronically filing taxes is growing in popularity. However, it can still take up to six weeks for an electronically filed return to be deposited into a tax payer's bank account. In emergency situations, six weeks is too long to wait. In both this case and when using future pay checks as security, the quick loan funding institution will gain possession of the return or pay check when it comes in. The borrower is still responsible for the interest charged above and beyond the principal amount of the paycheck or return.

These risky loans are still financially worthwhile for the same day lenders, because they typically charge more interest than conventional lenders. The frequency of loan default is much higher among quick loan funding lenders than it is in banks and credit unions. For this reason, the higher interest rates offset the financial losses resulting from borrower default. In addition, the borrowers with poor credit have fewer options, and cannot afford to be picky about interest rates. However, same day lenders certainly fulfill a much needed role in helping people with poor credit make ends meet in the case of an emergency or unexpected expenditure. "Then he said, Go, borrow thee vessels abroad of all thy neighbours, even empty vessels; borrow not a few." (2 Kings 4:3)

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