Borrowing comes in handy when you need money to fund urgent needs that cannot wait until you would have otherwise cash. Despite savings, you may need to borrow money to fulfil your needs and then come urgent loans in Ireland.
As the name suggests, these loans aim at helping people who need money to finance financial emergencies. For instance, your laptop has conked out, and you do not have enough money in savings to get it repaired. You can apply for these loans, also known as cash loans.
These loans are advertised as quick loans as well because they are processed the same day you put in the application. These are small loans that are generally paid off on the next payday or, in other words, within two weeks.
As these loans are processed quickly, the repayment is also made very fast. According to the lending industry trends, you will pay off the whole money and interest on the due date, which is usually not a month away.
Although cash loans are quick to apply for, it is vital to determine how much they will cost you. It sounds so friendly when it comes to making monthly payments, but it can be hard to pay off in one go.
How do Urgent Loans in Ireland Work?
Urgent loans do not work the same way as personal loans. The application procedure for these loans is simpler and shorter. When you want to apply for these loans, you just need to fill in the application form online, and you are all set to go.
Different lenders have different policies regarding quick loans. The charged interest rates and fees can vary by lenders. Once you are approved, you will get money directly into your bank account.
However, if you have opted for doorstep service, you will receive money in hand at the comfort of your home. You can use these funds for any purpose, but you will be obliged to pay them off in a lump sum either within a period of 14 days or by your next payday.
The APR for these loans are pretty high and can go up to 500%. Despite high-interest rates, fast loans in Ireland are very popular because of the following reasons:
- Because of a poor credit rating and lack of income, you may not be able to qualify for a personal loan at lower interest rates.
- You may not have knowledge about other alternatives, and if you have any alternatives, you cannot find them so easily.
- They do not require a credit check, so they seem to be the best option when your credit record is not stellar.
How much Does it Cost?
Undoubtedly, these loans are expensive, but the cost of urgent loans in Ireland varies by lenders, depending on the fees charged. It ranges from €10 to €30 for every €100 borrowed. For instance, if you have borrowed £100 for a two-week period and the lender charges €15 for every €100 borrowed.
It means you will pay off the total debt amounting to €115. However, if the term of the loan is about a year, a loan amounting to €100 will cost you €391. Your lender will let you know the APR when you sign the agreement.
Note that some lenders carry as high APR as 1,900%. For instance, Provident loans in Ireland are available at 1,500%. These APRs are incredibly high compared to credit cards ranging from 12% to 30%.
What is a Rollover Loan?
Some online lenders will allow you to roll over the urgent loan. This facility is given when you cannot make payments on time. For instance, you have borrowed €100 to be paid back in a two-week period.
If you find it hard to repay the debt, the lender can rollover the loan, which means it grants you another two weeks, but this time you will be paying down €130 instead of €115. Interest for the previous period will be added in the next period.
If you continue to roll over the loan for a period of one year, you will end up paying the total APR as interest. Note that fees will be charged separately so the cost will be much more than that.
The rollover facility can allow you to extend the repayment term when you cannot make the payment on the due date, but interest will be carried forward, and late payment fees will be added.
How do Quick Loans Affect your Credit Rating?
Quick loans have been designed to aim at people who need an immediate injection of cash during an emergency. Therefore, these loans do not require a credit check. As soon as you apply for these loans, you get funds directly into your bank account.
Since these loans do not show up on your credit file after being approved, they will not have an impact on your credit score. Many people think that these loans can help improve their credit ratings. Even if a cash loan appears on your credit file, it will not help with strengthening your credit score.
This is because they are paid off in a very short period, and it is not enough to deduce your financial behaviour towards obligations. If you want to improve your credit score, you should think of taking out an instalment loan.
Although urgent loans in Ireland cannot help you improve your credit rating, they can pull it in case you make a default. When your loan becomes delinquent, the lender can send it to a collection agency, and they have an option to report it to credit reference agencies as a collection account. It can severely damage your credit score.
Are Urgent Loans Risky?
A debt may or may not be risky regardless of interest rates charged. If you manage to pay off the debt on time, it will not affect you any ways, so you will find them favourable.
However, interest penalties and late payment fees will be imposed when you fall behind on payments. You will eventually fall into a debt trap.
What are the Alternatives?
Though fast loans seem to be the best option when you are in dire need of money, the bottom line is you should consider all alternatives at the time of borrowing money:
1. Credit Cards
Credit cards seem to be the best alternative if you need small funds for urgent reasons. However, it must have a balance.
You can avoid making interest payments if you pay off the balance within the grace period. Further, if you anyhow miss the payment, interest rates will still be lower than the APR of quick loans.
2. Friends and Family
You should try to borrow money from friends and family as they do not charge interest rates. However, make sure you keep your promise about payments. If you do not pay them back, this will cause a strain on your relationship.
Fast loans in Ireland are the best funding source when you need money for financial emergencies. Consider your repaying capacity, so you do not end up rolling over the loan. If these loans seem expensive, try considering alternatives like credit cards and friends and family.
Hudson is a graduate of banking and finance and works as a financial consultant at MyLoansBoat. He has a professional qualification to counsel people about money management. At MyLoansBoat, his key duties include shortlisting applications of borrowers and counseling them about credit score improvement, building an emergency cushion, retirement funds, and getting rid of debt. He is an ardent reader of finance books and uses the gained knowledge to help people with their finances. He also writes for the company’s blog on various topics like budgeting, investing, saving, debt management, joint finances, and the like. His aim is to dedicate his life to helping people have a debt-free life.