Quick loans Vs Personal loans: Which one fits your needs?
During a financial emergency, a short-term loan is always the first choice. But there are loan options. Quick loans and personal loans are usually the two most popular choices. But which one is the best for you? Well, that can be decided after comparing the two.
Read below, and at the end, you will be able to make a well-informed decision.
What are quick loans?
As the loan term indicates, Quick loans in Ireland are short-term, speedy credit options. These loans are used for last-minute financial emergencies. The application process is speedy and requires minimal paperwork. The loans are known for providing instant funds in a few hours.
These are good options for urgent needs like –
- Unexpected medical emergency or bills
- Short-term financial gaps before the emergency
- Managing emergency home or car repairs
What are the features of quick loans?
Here are the features of quick-approval loans to help you choose better.
- Fast approval and disbursement – The loans offer the vital features of instant approval and speedy disbursement.
- Smaller loan amounts – As these are designed for a paperless emergency process, the loan amount is always small.
- Simple application process – Most lenders offer a digitised application process. No guarantor, no collateral.
- High interest rates – As funds are disbursed quickly with minimal review of your finances, lenders compensate for the risk with higher rates.
- Short repayment tenure – The tenure ends in a few months, as the loans are only for temporary needs.
- Minimal credit check – Recent payment record is more important than credit history. Hence, you can apply with bad credit, too.
What are personal loans?
Personal loans are a popular loan product for short-term to mid-term needs. These have a longer tenure and a lower interest rate than quick loans. But these are also available for quick personal loan approval.
Purposes – Debt consolidation, medical expenses, home improvement, car repair, education, wedding, etc.
Personal loans can be of two types.
- Secured – When you secure funds against collateral, it becomes a secured option. The secured option has a lower rate and a bigger credit limit.
- Unsecured – When you borrow without collateral, it becomes an unsecured loan. Unsecured personal loans have higher rates than secured ones and lower borrowing limits.
Features of personal loans
The features of the loans below reveal their utility for your financial circumstances. The loans are offered by credit unions, online lenders, and banks.
- Larger loan amounts – As the loans fulfil short-term to mid-term needs, you can borrow a larger amount as compared to quick loans.
- Longer repayment tenure – The tenure is longer and spans from one year to seven years. You can easily pay back funds.
- Lower interest rates – The interest rate is lower due to a longer tenure in personal loans.
- Fixed monthly payments – The fixed interest rate ensures you pay the same instalment every month, making the budgeting easier.
- Comprehensive credit check – As the loan amount is larger and the tenure is longer, the lender performs a detailed hard credit check.
Advantages and disadvantages of quick loans and personal loans
Let’s be more rational and read the pros and cons of both loan types.
Quick loans pros and cons
| Pros | Cons |
|---|---|
| Super-fast access to cash | High rate of interest |
| Minimal or no paperwork | Short tenure causes financial strain |
| Available 24/7 through online lenders | Lower borrowing limits |
| Credit-friendly loan offers | Risk of falling into a debt cycle |
Personal loans pros and cons
| Pros | Cons |
|---|---|
| Fixed and lower rate of interest | Longer verification process |
| Larger borrowing amount | Higher rates for people with bad credit people |
| Longer repayment term | Early repayment penalty applicable |
| Improve credit score | Not for urgent financial needs |
When to choose a quick loan?
Quick loans have their own uses. You can choose them in the following circumstances.
- When you need instant funds in a few hours or on the same day.
- You cannot get a loan from banks
- You have a short-term financial gap before payday
- You have strong creditworthiness and a history of on-time repayment.
When to choose a personal loan?
For personal loans, the following are ideal conditions to consider.
- You have a short-term to mid-term need.
- Your income and employment are stable.
- You want a lower interest rate.
- You are fine with a longer application.
Tips to decide the best loan option as per your needs
Here are some suggestions to help you choose between the two loan options. These will help you get clear-headed.
How urgent is your financial need?
If the need is extremely urgent, a quick loan is a better choice. You will receive funds in a few hours. For urgent car repairs or to ensure smooth daily access to your workplace, quick loans are more useful.
What’s your credit score?
For those with a good credit rating, personal loans offer lower rates, longer tenures, and larger amounts. With a bad credit score, quick loans are suitable, but they come with high interest rates.
What’s your repayment ability?
If you can afford a higher interest rate, you can get a quick loan. However, in that case, a personal loan is an option. But because personal loans have longer tenures, you may get a lower rate and easier repayments. Also, secured personal loans are available.
Do you prefer comfort and speed, or do you want to save on costs?
Quick loans offer instant funds, but the interest rate is high. The personal loan process is longer than quick loans. But if you can wait, the latter is the better option.
The conditions above will help you to decide which one is the best choice. Whatever option you choose, there’s no need to ask how to get a quick loan in Ireland or a personal loan, as both require minimal paperwork. However, the time of fund disbursal varies.
Conclusion
Based on the comparative information above about quick loans and personal loans, you can now make a better decision. Both have their pros and cons, but both are useful. It all depends on your financial circumstances. If you need the money in an hour or a few hours, quick loans are a better option. If you can wait up to 24 to 48 hours, personal loans are not bad either.
However, it is vital to apply for any loan as per your repayment ability. Both are short-term loans with no collateral demand. Hence, you cannot expect quite a low rate. Missing repayments can cause a drop in credit score. Therefore, if you choose wisely, borrowing becomes a smooth and happy experience, and you will not be affected by a money crisis.
Ava is Editor-in-Chief at Givemyloan and is known for her deep and practical approach to modern personal finance. She has written several articles covering topics like personal loans, business loans, etc. Coming from an economics and finance background, she has worked behind the scenes to curate informative content to help borrowers identify the right loan option.
Ava’s role at Givemyloan lets her combine her interest in writing with her curiosity to explore the finance realm. She likes to be updated about what is happening in the lending industry. Most importantly, she tries to instil her knowledge in her writing in the best way possible.
She is passionate about helping borrowers look beyond the general features of a loan, i.e. about the fees and other intricate details. When she is not writing, she likes to read contemporary fiction. She is on a mission to help educate people looking for loans so that they take the right route.
