Emergencies can occur when you least expect them. Your car may need a new tire, or your house may need an HVAC repair. Many people take out a Quick Cash Loan to deal with unforeseen expenses. One popular online lender that many people use is First Loan. But is this the right lender for you? Keep reading to learn how First Loan works and how it compares to other options.
Finding the Right Personal Loan
With a personal loan, borrowers repay their money through monthly installments for a specific amount of time. Personal lenders typically do not have strict spending requirements, so you could use the money on almost any emergency expense.
Personal loans typically range from a few hundred dollars to a few thousand. You could get an installment loan that covers the cost of different unexpected expenses. Keep in mind that the loan amount you are eligible to receive depends on your net monthly income and your credit history. Individuals with high credit scores typically qualify for a lender’s maximum loan amount. But suppose you have a bad credit score. In that case, you may have to inquire with multiple lenders to find the best personal loan offer for your current situation.
Personal loans have a fixed or variable interest rate. Fixed interest rates stay the same throughout the repayment process, so you can expect to pay the same amount every month. But variable rates depend on a benchmark rate or index, which means they can increase or decrease unexpectedly. The best type of interest rate for your personal loan depends on your monthly budget and preferred level of risk.
The repayment length for a personal installment loan varies by lender. Still, you can typically get a repayment period that lasts months or years. This wide range is beneficial for borrowers because they can personalize their loan terms. You may prefer an extended repayment length to avoid high monthly payments if you receive a substantial loan amount. But if you only need a few hundred dollars for car repair bills, you may prefer a short-term financial contract.
Most personal loans are unsecured, so borrowers do not need to provide collateral. Collateral is a valuable asset that protects the lender in case of default.
Many lenders accept the following items as collateral:
- Cash in a savings account.
- Certificates of deposit (CDs).
- Free and clear vehicle titles.
- Investment accounts.
- Residential mortgages.
If a borrower cannot repay the outstanding balance, the lender can take possession of the collateral as compensation. Using collateral to secure a personal loan is risky, so carefully consider whether you want to use any personal property when looking for a lender.
Personal Loans Compared To Other Loan Options
A personal loan is a versatile financing option that you can use for various expenses. But how does it compare to other loans? Learn about standard emergency loans below to make the best borrowing choice for your unique situation.
Car Title Loans
A car title loan is a secured loan that typically provides thousands of dollars to eligible borrowers. Car title loans are also known as auto title loans, auto equity loans, and pink slip loans. A good credit score is unnecessary to qualify because you use your vehicle as collateral. If your car is valuable and has sufficient equity, you could be eligible for fast financing. However, it’s essential to know that car title loans are high-cost loans that usually have high-interest rates. And if a borrower falls behind on payments, they could lose access to their vehicle.
Payday Loans
A payday loan, or cash advance loan, is a small dollar loan with short repayment terms. Payday loans are single-payment loans, which means you repay in one lump sum instead of monthly installments. This type of loan is intended for individuals needing small loans between pay periods. Most lenders expect repayment within two weeks, although it’s possible to get a 3-month payday loan.
Payday loans are popular because they generally provide fast cash and high approval rates. While payday loans are convenient, the interest rate is usually very high. If a borrower is unable to repay the loan on time, the lender renews the loan. Unfortunately, many people end up stuck in a debt cycle due to excessive interest fees.
Home Equity Loans
A home equity loan (HEL) is a secured loan similar to a mortgage. A homeowner can borrow money using the equity in their home as collateral. You could get more than enough money to tackle various financial emergencies if you have sufficient equity. However, the approval process is very long. You will have to provide multiple documents and undergo an appraisal process, which can take over a month. In addition, you risk losing possession of your home if you experience issues with repayment.
Pawn Shop Loans
A pawn shop loan is a loan from a broker in exchange for collateral. Brokers usually accept all types of items, such as jewelry, collectibles, electronics, etc. The amount you can get through a pawn shop loan depends on the resale value of your item. But even if your item is valuable, you will likely only get a small percentage of the total value. Suppose you bought a gold necklace for $400. In that case, you may only receive a $300 loan. The repayment length for pawn shop loans is typically very short, and the interest rate can be pretty high. If you want a pawn shop loan, you may have to visit in person, which can make the comparison process a hassle.
Common Reasons To Take Out Personal Loans
Unlike other loan options, you can use personal loans for different types of emergency expenses. No matter what financial dilemma you are dealing with, you could use the money from a personal loan to deal with it. Learn about some common reasons people apply for a personal installment loan below.
Medical Treatment
Medical treatment can cost a lot, even if you have health insurance. While some medical visits can be planned, more often than not, people visit the doctor or emergency room due to an unexpected medical issue. You may break a bone or get an infection and require immediate care. Unfortunately, medical bills are often exorbitant. While some medical offices offer payment plans, they can be short and monthly payments are often unaffordable. But you could use a personal loan to pay a medical bill and make affordable installments over an extended period.
School Costs for Your Child
It seems like the cost of school expenses rises every year. Your child needs clothes and pencils, but you may also have to scrounge up money for certain immunizations, classroom supplies, and computer programs. Personal loans are meant for unexpected costs, such as school expenses! You could use your loan proceeds to send your child to school with everything they need.
Car Maintenance and Repairs
Owning a car means you can reliably get to and from almost any place. However, vehicle ownership also means a lot of maintenance and repairs. You may get a flat tire, broken tail light, or misaligned steering wheel at some point. A personal loan could help you get enough money to get your car back in driving condition.
Funerals
An unexpected death is, unfortunately, one of the top reasons people apply for personal loans. Funerals cost a lot due to various high-cost expenses, such as the funeral service, casket, embalming, headstone, and more. The average cost of a funeral varies per state, but it can cost upwards of five thousand dollars. Although there is a sense of urgency to plan a funeral, remember that you can take time to explore your options. Once you know how much you qualify to receive through a loan, you can choose your preferred funeral home and service package.
Does a Personal Loan Affect My Credit Score?
Suppose you are interested in taking out a personal installment loan. In that case, you may wonder if it will affect your credit score. Applying for any type of loan will inevitably affect your credit because most lenders conduct a hard credit check to verify applicant information and make approval decisions.
A hard credit check can decrease your score by a few points, so it’s a good idea to keep the number of loan applications you submit to a minimum. When shopping around for a lender, it’s a good idea to determine if you pre-qualify. Bad credit borrowers should look for online lenders that offer flexible qualification requirements and an easy application process.
Once you obtain a personal loan, know there are steps you can take to improve your credit score over time, such as:
Make Timely Payments
Making every monthly payment on time can help you increase your credit over time. Suppose the lender reports to the three major credit bureaus. In that case, you may see a positive effect on your score if you maintain a long history of timely payments. Your payment history is the most critical factor for most credit scores, such as the FICO score.
Pay Off the Personal Loan
Paying down your outstanding loan balance can positively affect your credit score. Your total debt can directly affect your score. Having too much debt in your name can prevent you from building high credit, but working on decreasing your principal balance may help you increase your score over time.
Loans like First Loan: What You Need To Know
Unfortunately, First Loan is no longer accepting new applications. If you need a same day loan, you must find an alternative option. But knowing how First Loan works and what benefits they offer may help you determine the type of loan you want to get.
Elem Indian Colony of Pomo Indians operates First Loan, which makes it a Native American-owned business. The Elem Indian Colony of Pomo Indians is a sovereign Tribal nation in the United States that offers tribal loans. But if you are new to borrowing, you may ask, “How do tribal loans work?” A tribal loan is a payday or installment loan offered by lenders owned by Native American tribes on tribal land.
While tribal loans are a popular borrowing option, it’s essential to know that they are controversial. Many lenders do not disclose interest rates, which can be exceptionally high. While they were active, First Loan stated on its website that they were “a very expensive form of borrowing.” First Loan was meant for short-term emergency financing and was not meant to be a long-term financial solution.
First Loan provided personal loans that ranged from $200 to $5,000. However, first-time applicants only qualified for loans up to $1,500. Returning customers in good standing could have received the maximum loan amount. According to their website, First Loan was a better alternative to payday loans because they quickly offered large sums of money with short repayment terms.
First Loan did not have any prepayment penalty fees or hidden fees. A prepayment penalty fee is a charge for early loan repayment. Since financial institutions rely on interest fees to make money from lending, some lenders penalize customers for trying to reduce the amount of interest they pay. But because First Loan did not charge prepayment fees, customers could repay the loan as early as possible.
The annual percentage rate (APR) range First Loan offered was between 615% to 859%. As you can see, the interest rate was relatively high. To better determine how much you would have paid to take out a loan with First Loan, it may be a good idea to use an APR calculator online. An APR calculator helps you calculate your total interest fees and loan amount. Knowing how much a loan will cost can help you choose the best loan offer for your situation.
Who Were They For?
First Loan offered quick and easy loan approvals for people needing short-term financial solutions. Suppose an applicant required money to deal with an unforeseen emergency as soon as possible. In that case, First Loan may have been a good option. However, since first-time borrowers could not access the maximum loan amount, they had to find an alternative lender if they needed more than $1,500.
To qualify for a personal loan through First Loan, the applicant must have been at least 21 years of age and resided in a state where First Loan conducted business. In addition, the applicant would need to have had the following:
- A job or regular source of income.
- A valid bank account in good standing (no prior derogatory actions).
- A valid email address and phone number.
First Loan did not offer any information on credit score requirements, so it is unclear whether there was a minimum credit score requirement. However, the website emphasized that First Loans were meant to service a wide range of borrowers and that approvals were quick and easy. If you inquired, you may have been able to get an instant pre-approval decision based on preliminary information.
First Loan was available in various states throughout the nation. However, residents of the following states were not eligible to receive a loan from First Loan:
- Arkansas
- Connecticut
- Florida
- Georgia
- Illinois
- Maine
- Maryland
- Massachusetts
- Minnesota
- New York
- North Carolina
- Pennsylvania
- South Carolina
- Vermont
- Virginia
- West Virginia
What Could I Have Used Them For?
The benefit of personal installment loans is that borrowers can use their money for unexpected expenses. However, some lenders may still place spending restrictions on what you can and can’t buy. Before you apply with a lender, ask if there are limits to what you can do with your loan proceeds.
First Loan stated that their loans were ideal for the following emergency situations:
- Medical Emergency.
- Home Repairs.
- Car Repairs.
- Late Fees.
- Bounced Checks.
- Rent.
How Did the Application Process Work?
Although First Loan is not currently accepting applications, their loan approval process was generally quick. Generally, an applicant would follow three steps to get a personal loan through First Loan.
The first step was to inquire online through the website. The applicant would have needed to submit basic personal information, such as their name, contact details, monthly income, and more. The second step was receiving a fast approval decision after submitting the necessary information. If the applicant pre-qualified with First Loan, they would likely have received a loan offer with their potential repayment terms. The third and final step was getting cash via an electronic deposit to a checking account.
First Loan stated that eligible applicants received their money by the next business day.
However, the time it took to get the loan money depended on how soon a service representative verified the applicant’s information.
When it was time to make a monthly payment, the customer had a few choices. Most borrowers chose to have loan payments automatically deducted from their bank account, but there were alternative options. Instead, the customer could have selected to pay by mailing a cashier’s check or money order to First Loan, PO Box 1536, Lower Lake, CA 95457.
CreditNinja: How Does It Compare?
CreditNinja is a premier online lender that offers personal loans through an easy online application process. CreditNinja has helped over 275,000 customers get fast financial relief since 2018. If you are looking for a loan like First Loan, CreditNinja may be a good alternative.
We offer personal loans in multiple states across the nation. Need money quickly? Rest easy knowing you don’t have to travel to a store location. You can complete the approval process right from the comfort of your home. There is no need to waste gas or spend time waiting in line to speak to our customer service team.
How Does CreditNinja Stand Out?
CreditNinja offers a lot of exceptional benefits, such as fast funding and flexible credit score requirements. Keep reading to learn how we stand out among the crowd and why we continue to be one of the top online lenders.
Fast Funding
At CreditNinja, we understand how important it is to provide fast financial assistance. That’s why eligible applicants can get money as soon as the same day.* Once approved, we provide loan proceeds through a quick, direct deposit sent straight to your bank account. To take advantage, you just need to provide your account number and routing number.
Easy Application Process
We have made our online application process as streamlined and straightforward as possible. There are no complicated questions or vague directions. In fact, there is no need to waste time uploading any documentation. You just have to answer a few basic questions and provide personal information, such as your name, date of birth, Social Security number (SSN), and income details.
Exceptional Customer Service
We are known for providing exceptional customer service. We encourage interested borrowers to read our reviews and check out our Trustpilot rating. While getting financial assistance quickly is essential, working with a lender that provides quality service and care is also crucial. Customers can call, email, or write to us when they have questions, comments, or concerns.
Convenient Repayment Lengths
The repayment length for a personal loan is very flexible. No matter what type of repayment length you prefer, short or long, you may find a repayment plan that fits. When deciding to apply for funding, consider whether you want to repay your loan as soon as possible or over time.
But keep in mind that an extended repayment length will increase the total cost of the loan. The good news is that even if you get an extended loan agreement, you can choose to pay off the loan early. We do not charge prepayment penalty fees, which are charges for early or additional payments. This gives our customers the financial freedom to save on interest fees.
Flexible Loan Amounts
At CreditNinja, we offer a wide range of loan amounts. We understand that unforeseen expenses can be small or large, so we provide loan amounts to match.
Referral Program
We offer an exclusive referral program for customers. If a customer refers a friend for a loan with CreditNinja, and the friend signs a loan agreement, the existing borrower and the new borrower could each earn a financial reward! All you have to do is provide your email and share the CreditNinja referral link through social media, text, or email.
Who Should Pick CreditNinja?
CreditNinja is a viable option for anyone that needs emergency cash for unexpected expenses. Anyone in need of a personal loan is encouraged to apply. Personal loans are a versatile financing option for various costs, such as medical bills, car repairs, house repairs, and more.
CreditNinja may be an excellent option for low-credit borrowers. Applying for a personal loan may be stressful for consumers with a bad credit history. But applicants may still qualify with CreditNinja despite having a low credit rating. When we make approval decisions, we look at your entire financial history. We don’t make qualifying decisions solely based on someone’s credit score. Inquire today to see how much you may be pre-approved to get with a fast and convenient personal loan.
How Will the Loan Process Work?
The application process is simple and easy to use because, at CreditNInja, we understand your time is valuable. Our three-step approval process was designed to help you get an instant qualifying decision and fast direct deposits.
If you are interested in applying for one of our personal loans, you can expect the process to look like this:
Step 1: Apply Online
The first step is to fill out the online application form. The best perk about our online process is that you do not have to waste time looking for supporting documents. All you have to do is answer a few basic questions about yourself. Be ready to provide your name, date of birth, state of residence, SSN, etc.
Step 2: Find Out if Your Qualify
Once you answer all our online questions, you may get an instant approval decision. You can see your personalized offer if you qualify for a personal loan. You will be able to view your loan amount, interest rate, APR, and repayment length before accepting the loan offer.
Step 3: Get Your Money
After reviewing your loan offer, you can sign the loan agreement electronically. You will then have to submit your bank details to receive a direct deposit. Be ready to provide your bank name, routing number, and account number. Once you submit all the necessary information, you may expect to receive your money as soon as the same day!*
*Applications approved before 10:30 a.m. CT Monday-Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case the loan, if approved, will be funded the business day after such additional verification is completed.
References:
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