Urgent loans, as the name suggests, are a type of emergency loan that helps tick you over when money is tight. Such loans are not available from banks, but direct lenders do provide them even though your credit score is not up to snuff. The size of these loans is very small, usually not more than €1,000, and the repayment period is not more than a few weeks. On the due date, you will pay off the debt in full. Thanks to flexible lending, a few lenders could allow you to pay down the debt in weekly instalments.
Urgent loans are quite popular as you can easily get the nod for them. Even though your credit rating is not up to scratch, you can get approval without a hitch. You will get money the same day in your account, provided you do not fill in the application form in late evening. If so, the loan will be processed the next day.
These are the facts that you already know, but there are several that lenders would not want you to know. What you read on their websites and landing pages about these loans is not the full details about these loans. They let you know only what they think is enough for you to decide whether or not you should take out these loans.
Hidden facts about urgent loans in Ireland
If you are looking to take out urgent loans in Ireland, you should know the following facts that most of the lenders will not let you know:
- Urgent loans are the same as payday loans
The fact is that urgent loans are the same as payday loans. Over a decade of unethical practices against payday loans resulted in negative publicity. As a result, many payday lending companies had to stop dealing. However, these loans have never been very famous in Ireland, but Irish direct lenders provide the same sort of loans using different names.
You can call them emergency loans or cash loans. Any way you slice it, their features are the same as payday loans, and they are expensive. You will get approval the same day and pay off the debt in full on your next payday.
- APRs could be very high
Although lenders advertise these loans to be more affordable and better than payday loans, interest rates could be very high. APRs are different from interest rates as they involve the fees and associated charges. It is impossible to get clarity about the APRs and interest rates you will be charged before you officially apply for the loan. A pre-approval letter just lets you know the estimated interest rates, but when you get the agreement, you will find them to be quite high. Further, the pre-qualifying letter is not possible with these loans.
- You will likely get approval less than you demand
Urgent loans are very convenient. This is what is advertised, but they are not as convenient as they seem. Most of the lenders will cap on €1,000, but most of the lenders will hardly be reluctant to offer this much money. These loans are usually very small. They are particularly available only for small emergencies. Most of the time, lenders will give you the nod for only €500.
If you want to borrow up to €1,000, it is likely that your lender does not lend you this much even though you are in dire need of it. They will check your repaying capacity and credit score. In the event of a poor credit rating, it becomes obvious that they will offer you less money than you apply for in order to lower their risk.
- Urgent loans can fall you into a debt trap
Urgent loans work the same way as payday loans, meaning you will have to pay off the full money on the due date. The repayment term of these loans is very small, most probably not more than 15 days. If you fail to pay off the debt on the due date, late payment fees will be added to your account, and interest will accrue for the next 14 days.
This is how the money will keep growing, and then after three months, your account will go into default. Your lender will contact a collection agency, and despite the fact that you do not turn to payments, a lawsuit will be filed against you. Then, you will have to clear the debt as per the instructions of the court.
Although these loans are very small and flexible, when you fail to make payments, you may end up with severe consequences.
- Not all urgent loan providers are registered
It is suggested that you take out urgent loans from registered direct lenders. The benefit of borrowing from such lenders is that you can file a complaint against them in case of unauthorized lending. However, if you borrow money from an unregistered lender, you cannot make any complaints against them. You will be solely responsible for your own mistakes.
Non-registered direct lenders can be scammers as well. They could extortionate money from you by charging very high-interest rates, especially if you are looking to take out urgent loans for bad credit in Ireland. The interest rates could be so high that you will find it impossible to pay off the debt. The amount of debt will quickly add up, and soon, you will find yourself in debt up to your neck.
To wrap up
Urgent loans in Ireland are aimed at helping you tide over when you are stuck with an emergency, but there are several facts that you must know before you apply for them. It is always suggested that you borrow money only when you need it and you never borrow more than your needs.
Check your credit score and repaying capacity. If you think you will struggle to pay down the debt, you should consider other alternatives, like borrowing money from your friends or relatives. Work on your budget to cut corners.