What is a fast loan?
A fast loan is one way of describing a short-term loan, typically designed for speed and convenience. Fast loans are often used as a solution in financial emergencies, for example to repair a car or replace a washing machine.
A fast loan works in the same way as any other standard loan. If you need a loan fast the main difference tends to be how much you can borrow, how quickly you’ll have to pay the loan back and the interest rate charged on the loan.
Typically fast loan providers will lend smaller amounts, at a higher rate of interest, and borrowers tend to pay the loan back within 6 - 24 months.
How do fast loans work?
If approved, you may receive the cash the same day you apply for the loan into your bank account. You’ll then pay back the total amount lent to you, with added interest over a pre-agreed period.
The terms of a fast loan will be agreed upon upfront between you (the borrower) and your loan provider, also known as the lender.
Where can I get a fast loan?
You can apply for a fast loan in several different places, including;
Comparison sites like ours allow you to compare fast loan providers. This is helpful because you’ll be able to compare interest rates and fees to find the most suitable loan for you. Most good comparison sites also provide an eligibility checker to determine which providers may be the most likely to accept your application.
Using an eligibility checker before you apply for a loan is a good idea because if you apply for a loan and get declined, this may be recorded on your credit file and be visible to other lenders. .
When using an eligibility checker, lenders usually perform a soft search, which doesn’t impact your credit report. This gives you an indication of which lenders will accept your application before you apply. You may see that the soft search on your credit report, but other lenders won’t.
Direct with the lender
You can apply for fast loans online directly with a lender. This is likely to be more time-consuming if you want to compare terms and interest rates without using a comparison site. When submitting a full application with a direct lender they will do a hard check on your credit report to assess your affordability, which other lenders will be able to see.
You can apply for short-term unsecured loans with some high street banks; however, the criteria tends to be much stricter and requires a good credit history. It’s important to compare rates and fees of the most famous lenders to lesser known ones online because you aren’t always guaranteed the best rates with the most recognised banks.
How can I get a fast loan?
Applying for fast credit is relatively straightforward.
One of the simplest, fastest ways to apply for a fast loan is online. Once you’ve done your research and found a loan and lender that suits your needs, the loan application form will include questions like;
- Your name
- Your address and previous addresses
- Your employment status
- Your income
- Your outgoings
- The number of people that depend on you
- Your employer's details
Can I get a fast loan with bad credit?
Although traditionally, it’s harder to be approved for a loan if you have a poor credit history, many fast loans for bad credit are specially designed with poor credit customers in mind.
You may find your interest rates are higher on loans you’re offered if you have a bad credit rating, and the amount a lender would be willing to lend to you is likely to be smaller.
If you don’t need a loan straight away, there are ways you can improve your credit history, and in time you’ll likely be offered better interest rates as your credit rating improves.
Ways to improve your credit rating include;
- Registering to vote at your current address helps to prove where you live
- Keep your credit use low
- Check for any errors or mistakes in your report
- Keep old accounts open to demonstrate a long credit history
- Payback anything you owe on time and in full
What are the benefits of fast loans?
If you’re facing a financial emergency and need an immediate solution, a fast loan can help. In the past fast payday loans were historically the only way of getting a loan quickly, however times have changed and with the advancements of technology, this is no longer the case.
If this is the first time you’re borrowing money, taking out a loan can help you to build your credit score so long as you make the repayments in full and on time.
Unlike standard loans, short-term loans can also be easier to qualify for.
Are there any drawbacks to fast loans?
A fast loan can harm your credit score if you do not keep up with your repayments.
Fast loans tend to be an expensive form of borrowing. Interest rates are typically much higher than standard loans and mean you repay much more than you originally borrowed. You also pay more for the convenience of getting access to money quickly and easily.
There are times fast cash loans shouldn’t be used, and these include;
- To repay other forms of credit
- To pay a bailiff
- To pay a company demanding payments
- To gamble
- Non-essential purchases
If you use fast loans regularly, you could risk getting trapped in a debt spiral because you’re borrowing to repay your income shortfall regularly. If that happens, it’s time to look at where you can make cutbacks or supplement your income.
It might also be worth looking into any grants you’re eligible from the government and finding out if you qualify for any benefits.
If you’re unable to make your loan repayments, the first thing you should do is speak to your lender, who may be able to help you with a repayment plan.
Charities such as Money Helper and Step Change can also offer advice if you are struggling to repay your debts.
Are there any alternatives to fast loans?
Yes, there are several alternatives, but what you can get approved for will depend on your credit rating. Alternatives include;
An overdraft is a credit product offered by your bank account. It means you can continue using your bank account to make cash withdrawals and pay direct debits even if you don’t have any money in your account.
Setting up a formal overdraft with your bank before you borrow money in this way is essential. Overdrafts are a temporary solution to cash flow problems and shouldn’t be used on an ongoing basis because they have high interest rates and can be one of the most expensive forms of borrowing.
Credit cards can be helpful if you need to make a large purchase from a retailer. Depending on your credit rating, sometimes you can borrow money on a card at an interest rate of 0% for a fixed period. However after that period finishes, they are likely to charge high interest rates on any outstanding balances.
If you have a bad credit rating, a credit card might be difficult to be approved for, so you should choose a card designed for those with a poor credit history.
If you have a bad credit history, a guarantor loan may allow you to borrow more for longer than a fast loan, but you’ll need to provide the name and personal details of a friend or family member willing to pay the loan back for you if you’re unable.
Borrow from friends or family
If you need cash in an emergency and only need to borrow it for a short period, it could be worth considering asking a family member or friend to lend you the money. You must be sure you can repay the money because your relationship could suffer if you cannot pay it back within the agreed timeframe.
Fast loans FAQs
It’s possible to get the cash from a fast loan in your account the same day you apply, providing you pass all the eligibility requirements and are approved for the loan.
Some providers boast you’ll receive the money within 15 minutes, but typically you can expect the cash to reach you the same day if approved.
If more checks are needed before you’re approved, this could delay the process, and you may find you’ll need to wait up to five working days.
It will depend on how you manage your loan. If you repay everything you owe on time and in full, your credit score will improve over time, giving you access to cheaper borrowing in the future.
If you default on your loan, miss payments or are late with your repayments, your credit rating will suffer, and you could find it much harder to be approved for credit products in the future.
When reviewing your credit file for future application some mainstream providers may view having a short term, fast or payday loan on your file as a negative which could count against you when making a decision on whether or not to lend to you.
It’s also worth remembering that any loan application can temporarily reduce your credit score because of the hard search the lender will make during your application process and adding a new credit account to your report.
It’s important to make sure your fast loan provider is fully authorised and regulated by the Financial Conduct Authority (FCA).
You can check whether a lender is regulated by searching the FCA's register.
If you cannot make your loan repayments, you may be charged a fee plus interest on any missed payments, and your credit record will be damaged because your lender will inform the credit reference agencies about your missed payments which will be visible to other lenders for up to 6 years.
Eventually, you could be issued a County Court Judgment (CCJ) by the lender, which will stay on your credit report for six years, making it very difficult to be approved for things like mortgages, credit cards, loans and mobile phone contracts in that time frame.