To figure out which one will work best for your needs, take some time and do some research first so that you can decide with all the facts at hand instead of going off what somebody else says about which one is the best option.

Personal loans and their purpose

One of the main benefits of personal loans is that it has no limitations of use provided by the lender. Some people take out personal loans for things like home repairs or medical expenses, while others use them for more frivolous purposes, like vacations or shopping sprees. But, before signing an offer with a lender it would be advisable to learn more about different personal loan companies that offer these services. Applying for loans through online platforms offers you options to choose something that is the best fitting for your financial situation, and in a short amount of time. 

What is a payday loan?

A payday loan is a type of short-term cash advance provided by an authorised lender. The borrower writes a personal check to the lender for the amount they wish to borrow plus the fee, which is typically charged as a percentage of the face value and payable in one lump sum on the date of their next payday (hence "payday"). This is a great option for people with a bad credit score who need to make a large purchase or cover unexpected expenses. Unlike traditional loans, you can receive a bad credit loan within 24 hours despite your credit history. But it is important to note that not all companies have equal conditions, some have an easy online application process, while others offer higher rates.

Benefits of a payday loan

The biggest benefit of a payday loan is that it requires little-to-no credit checks, thus making them available for almost everyone, regardless of their history with credit. Additionally, since most lenders are online companies, you can apply for an emergency loan online, get approved within minutes, and have access to the money very quickly, which is great if you're in immediate need of cash.

The drawbacks of a payday loan 

While there are many benefits to a payday loan, there are also some things you need to be aware of before taking out one. First, since it is short-term, you will pay high-interest rates for borrowing the money compared to regular loans. However, people who have a bad credit score are usually not even eligible for other types of loans. It is important to do your research and read carefully the terms before signing. Second, if you don't pay off your loan by the due date (next payday), additional fees will be added to your final balance making it very expensive. So make sure you plan your funds well so you don’t get caught with the payments.

What is an instalment loan?

An instalment loan is a type of long-term loan that may be given for between three and five years with a set monthly payment. Instalment loans have a fixed interest rate and don't have any hidden fees or rollover payment due dates. They are great for people who need a little extra time to pay off a large debt but still want to be rid of it as quickly as possible.

Benefits of an instalment loan

One of the biggest benefits of an instalment loan is that you get a set time frame to pay it back and the interest rate is fixed. This gives you a specific timeline and allows you to budget for your monthly payment without any unexpected costs which could throw off your whole plan. Another advantage is that since most loans are unsecured, you can get approved for a larger loan amount than you would with other types of financial assistance such as a payday loan.

The drawbacks of an instalment loan

Just like anything else, there are some disadvantages to taking out an instalment loan as well. First, often the borrower will need excellent credit to qualify for this type of loan, which can leave those with bad or no credit out in the cold. Second, they often have a much longer repayment period than other types of loans which means you pay more interest overall. Third, if you are struggling to make payments on your instalment loan, it is very difficult to change terms or adjust your monthly payment.

Personal loans can be used to pay for personal needs like utility bills and groceries or even significant expenses like debt consolidation. In general, personal loans are pretty simple to obtain because you don't need a lot of documents to avail one. You only need residential proof, a few months' paychecks, and proof of employment. If you have all of them, you're all set to get the money you need.But when you are self-employed, you may need to go through hoops to secure a personal loan and prove you can pay it. While the application process might be more complicated, it doesn't mean it's impossible. 

Personal Loans For The Self-Employed

A personal loan for a freelancer can take different forms. For example, it can cover business expenses and still be considered a personal loan. Here's a rundown of a few types of personal loans for self-employed individuals.

Online Lenders

Most online lenders tend to work with self-employed individuals. As such, it shouldn't be too hard to get a lending company you can trust. Be sure to evaluate your good reasons to get a loan and look for a lender that provides immediate financial support quickly and safely.  Apply for a loan that suits your credit score to get the best rates available.

Business Credit Cards

If you need cash immediately, business credit cards can help you. A business card credit allows borrowers to get money to cover a business expense. On top of that, applying for one will help you build your business credit so that, in the future, you can sign up for larger loans. You'd need to provide your business details, like employer ID, estimated monthly expenses, and legal structure.

Credit Cards

If you have a good credit score, credit cards are an excellent way to borrow a small amount of money. You can take out small amounts up to the maximum limit. Plus, you can repay the balance each month to avoid hefty interests. 

Guarantor Loan

This type of loan is easier and more convenient to get, unlike other financing options. You'll need a relative or a friend who will financially back you up and will promise to pay the loan if you default. Before applying for this loan, make sure to assess its implications on the credit score and finances of the party involved. 

Payday Loans

Payday loans are developed to help borrowers in dire financial situations. However, they aren't a long-term financial solution. Generally, payday loans must be paid off during the next pay cycle and usually range between $100 to $500. 

How To Apply For A Personal Loan When You're Self-Employed

Self-employed individuals may qualify for a personal loan. However, it might require more work than usual. To start your loan application, you'll need to prove your identity first. You can do that by presenting a valid ID like a passport or driver's license.

Next, you'll need to verify your income. Generally, full-time employees provide past two years' W2s to prove their income. But self-employed individuals don't get W2s for their job. You can use some other documentation like bank statements, Schedule SE, income tax returns, and 1099s. Additionally, you should save previous years' forms because most lenders request at least two years of documentation for self-employed individuals. Contracts for multiple clients are also helpful to prove your income. You may also need to show a strong credit history. Keep in mind that credit is one of the most convincing markers of financial competency. 

How To Boost Your Chances Of Getting A Personal Loan

Your credit history and income aren't the only details lenders use to confirm your eligibility for a loan. As a self-employed applicant, you can take steps to make your loan application more attractive to lenders. Many lenders search for an emergency fund or healthy savings from self-employed borrowers. If the applicant can't show sufficient income to pay for the loan, their savings can act as a backup plan.

You must keep your debts small to even out some of the risks lenders take. Another thing lenders like to see in your application is a stable career path, specifically at least two years.

Conclusion

If you are considering a personal loan and are self-employed, you need to check your budget to find out what you can afford to spend on a monthly loan payment. You wouldn't want to get approved for a personal loan and discover that you can't manage to pay it. The next step is to compare options from various lenders, including credit unions, online lenders, and banks. By doing so, you can find a loan with the most competitive fees and terms. 

Have you ever blown a tyre and needed to replace it fast? What about a time when one of your family members suffered an injury due to their job? How about the many times you uncovered an ideal business opportunity, only to be frustrated that you didn’t have access to capital at that exact moment? As an entrepreneur and investor, you know that investing takes money to make money. But it also takes seizing opportunities as they arise. To ensure you don’t miss the next unbelievable deal that comes your way, this article is a quick guide to help you understand same-day loans.

What is a same-day loan?

A same-day loan is simply a loan distributed on the day that it is approved. Same-day loans are sometimes called emergency loans or payday loans, but the essence of each is similar. These are short-term loans that typically carry a higher interest rate than a bank loan or other form of lending. Normally, same-day loans are for small amounts up to USD$2,000 (or whatever your state allows) and are required to be paid back, including fees, within four months or less. In some cases, borrowers might have to provide electronic access to their bank accounts to the lenders. 

 Like every commodity, you pay for convenience and speed. Applying for same-day loans is relatively effortless and can be done online from any device with an internet connection. The process is safe, reliable, legal, and you can receive your outcome and money transfer almost instantly. In addition, companies can accept applications at accessibly located kiosks or online at any time, with a dedicated customer service team during regular office hours.

What do you need to get a same-day loan?

Unlike applying for larger loans at banks, applying for a same-day loan is relatively simple. However, you will need to have specific documentation at hand. At a minimum, many financial institutions require the following information:

• Bank account details
• Credit card information
• Other personal details

 However, the US Consumer Financial Protection Bureau (CFPB) has set specific regulations when getting these loans. Some lenders will require you to be at least 18 years old, must have a checking account holder, proof of income, and some valid identification. Check with your state or territory for other conditions they need lending institutions to ask their borrowers. In addition, most lenders will do a credit history check. However, same-day lenders are typically more flexible than banks or other lending institutions. They mainly favour your current ability to make the repayments rather than your complete credit history. In most cases, if you are gainfully employed, these lending institutions can approve your application.

What should you consider when getting a same-day loan?

If you consider applying for a same-day loan, it is best to look at the bigger picture. Ask yourself the following questions:

• Do I need the money right now?
• Will I be able to pay off the loan when it’s first due?
• Will I be paying more in the long run if I don’t access a same-day loan now?
• Can I borrow the money from friends or family instead?
• Is an advance on wages a possibility?
• Will my credit card offer a lower interest rate for a cash advance?

Same-day loans typically offer interest rates of approximately 20% plus associated fees. As a borrower, you very well might be able to justify this expense to take advantage of a sudden business opportunity. Sometimes an offer is too good to pass by, so having access to instant capital can make you money in the long run. Furthermore, same-day loans do come with a few risks. For one, lenders can tack on fees to your total amount when you can’t pay for the initial loan amount. Depending on the lender, they can add, at the most, USD$30 for every USD$100 borrowed by the borrower. As such, many individuals have bankrupted themselves when unable to pay off the amount they borrowed on the agreed date. This makes same-day loans one of, if not, the most costly ways to get quick cash. 

Summing up

A same-day loan is a convenient way to get cash fast, especially in emergencies. Some lending institutions might only request some forms of ID and require employment details, and it’s by far quicker to apply for a same-day loan than a regular loan. Nevertheless, make sure you prepare yourself to pay for the full amount, so you won’t have to pay for additional fees and put yourself in a hole. In any case, make sure you get same-day loans from accredited and trusted lending institutions.

However, since obtaining a business venture loan can take a very long time, there is value in financing your business necessities effectively and timely with a personal loan for entrepreneurs with good credit scores. Keep reading to know more about determining your capital needs in business and why it is important for your further success.

How To Determine Your Capital Needs In Business?

To get the capital that you require, you must know your capital needs in your business. Generally speaking, your needs will be determined by the type of business you are starting, along with additional factors like seasonality, number of employees, monthly expenses, etc. When you have determined the type of business you are starting, along with these additional factors, there are two ways to determine your capital needs in business.

Using A Capital Budgeting Model

A capital budgeting model is an easy way to figure out your capital needs in business. However, it will be critical for you to have good cash flow forecasting skills since the main purpose of using a capital budgeting model is to determine the optimal timing for purchasing fixed assets. This method involves calculating various scenarios to find an optimal plan for future cash flows based on the factors that will affect them.

Using The Unit-Of-Production Method

The second method is the unit-of-production method. In this case, you will need to figure out the capital needs of your business at a future date, and then you can use that to determine the required amount of capital for that date. You can find the answers to these questions by determining:

• Your sales – What is your revenue? How many sales will you make? This will tell you how much profit is expected from operations and how much working capital is needed. It also lets you know what level of sales must be attained to break even (or if profit is expected).
• Your expenses – What are your total costs? This will also tell you the amount of working capital needed to operate your business. This amount will vary based on the factors you have determined earlier.

It is essential to understand that the stages in case 2 are based on future projections, which means that you must estimate what factors will impact current cash flows to project future cash flows. The idea is for you to find a method that fits your business’s needs. Be sure to check with a financial advisor or accountant if necessary.

Questions That Will Help You Determine Your Capital Needs In Business

Once you determine the level of sales and expenses for your business, you will determine the capital needs in business. Here are some questions that will help you determine your capital needs:

• Type Of Business – To start a new business, you need to consider the type of business. If it is an online retail store, you must consider how much it costs to hire and retain employees and whether or not there is seasonal demand (i.e., Christmas).
• Seasonality – Several factors can affect seasonality, including local economic conditions, holidays, weather, and price competition. For example, it is difficult to lose money in the holiday season, but in the summer months, when they are selling less expensive items, there can be a lot of competition, and margins will be tight.
• Number Of Employees – You must consider your number of employees and how much they will cost in payroll and benefits. There are different considerations when it comes to hiring employees for seasonal positions versus full-time positions. If you have seasonal positions, you must be ready for lower employee turnover rates. In contrast, if you hire full-time employees, expect higher costs.
• Monthly Expenses – In addition to payroll, you will have other expenses that can vary from month to month, such as rent, utilities, and insurance premiums. Having a fixed or low rent is an advantage over having high rent because you must pay the rent, even if sales are down.
• Vendor Credit Availability – If you have unique items that are difficult to find elsewhere, you may be able to negotiate for better payment terms with vendors. Having timely payment terms with vendors is critical to maintaining vendor credit availability.

Common Sources Of Short-Term Business Capital Financing

There are many short-term business capital financing sources, including trade creditors, payday loans, factoring, and line of credit.

Trade Creditors

Credit from trade creditors is often seen as a good source of short-term business capital financing because it is easiest. Trade creditors are basically businesses that you have done business with in the past. These creditors will extend credit on a verbal agreement on the assumption that you have a recurring business. However, there are cases where payment is slow or not made at all because trade creditors choose to wait until the end of their fiscal period. There are also instances where they sell their accounts receivables (if allowed) to collect payments before you pay them.

Payday Loans

Payday loans are short-term advances of money that are made available within a period of two to ten days. Payday loans are regulated by the state in which they are issued, but they do not require checking or bank approval. Usually, loans are deposited on prepaid debit cards if needed. 

You have to leave collateral in the form of your checking account, car title, or some other item that you can quickly liquidate to obtain access to your money until your payment is received. If you have bad credit, the interest rates are typically higher than for other types of short-term instalment loans.

Factoring

Factoring  is another source of short-term business capital financing. You can request your business to be factored in if you have sales below the minimum credit line. Factoring is also called invoice discounting or invoice finance.

A merchant account provider will take your invoices and apply a discount to purchase their services until your customer pays them in full. This kind of financing is typically short-term because the interest rates are generally higher than for traditional bank loans or personal loans.

Line Of Credit

A line of credit is typically used by businesses that need to make large purchases in a short period, such as machinery, plants, and equipment, computer equipment, etc. Your bank will set up an account for you with a line of credit that is limited to a certain amount. This will depend on how your business has been doing, but most banks will expect to see monthly sales of several thousand dollars for you before they extend a line of credit.

The Bottom Line

Business capital is very important. It is the money you will use to buy items or supplies, pay employees and make ordinary expenses. For refinancing business capital, you should understand the amount of capital required for an individual business. This will be determined by your revenue, expenses, assets, and liabilities. You must then determine the profit that you expect to make in your business. You can then consider these factors before estimating whether or not to seek financing from a bank or other short-term business capital financing sources to finance your business needs.

Most people are unaware of the benefits that payday loans online give them. Payday loans will help you get cash right away. The financing costs of these loans may be slightly higher, but they make up for it with convenience and quick approval.

Payday Loans Only Have A Few Requirements

It is not difficult to apply for a payday loan online as you only need to fulfil a few standard requirements. The main condition is a constant source of money. As long as your account receives a regular cash flow, you are already partially guaranteed to find a willing lender. You will find suitable conditions with payday loans online.

Other conditions are a working and active bank account and certification as a permanent citizen in your state. To get a payday loan online in your area, you must be over 18. You will probably meet these requirements if you are already a professional. This all is also applicable to the 1000 dollar loans you can get at DirectLoanTransfer.

It's A Fast Process

One of the main advantages of online payday loans is that they do not take too much time and effort to process. A decent online payday loan organisation processes your application as soon as possible. The exact time it takes to process a payday loan online depends on the organisation you choose.

If you are fortunate enough to have chosen the best online payday loan, you can get your money on the same day as the application process. However, if you opt for a regular loan instead, you may have to wait a few days or even weeks. Fortunately, many online lenders offer this type of loan so you have many options. The fast disbursement process of payday loans makes them an ideal choice for emergencies.

You Can Choose Repayment Terms

When you apply for a payday loan online, the lender will advise you on the options of the loan repayment period. In fact, this type of loan is intended only for temporary financing for a period of two weeks to a month. However, some lending companies allow repayment within three months.

Since these are short-term loans, online payday loans will not affect your funds for a long time unlike other types of loans. In any case, with a shorter repayment period, it also has a higher interest rate. Before you decide to get a payday loan online, you need to make sure which repayment period is right for you. Just ask if there are any options where the loan you choose will not put a serious strain on your accounts. You can negotiate with your lender if they can authorise a lower interest rate if your maturity ranges from two weeks to a month.

You Don’t Need Personal Property Insurance

Compared to a traditional mortgage, or car loan, payday loans online do not require personal property insurance. Your stable payment is sufficient confirmation to the lender that you can return the amount received. However, this also means that lenders can keep your property as a result if you do not pay regular instalments.

Online payday loan lenders (although not secured) usually have access to your accounts as a loan requirement which is an alternative risk. Likewise, creditors can take various measures transferring your obligation to collection or suing you for a large debt.

You Can Work To Increase Your Loan Amount

For new borrowers, many lenders limit the amount they are allowed to borrow. You are only entitled to receive an amount within the limits of your income and the creditor's capabilities. When you repay your entire initial payday loan, your lender can continually increase the amount you are allowed to borrow.

State laws determine the base and maximum amount that money lenders offer as payday loans. The online lender will tell you the total amount they are willing to provide you during the application process. Please note that repaying the loan online on time will help you build a good relationship with the lender. It also means you can access a faster device during crises.

Easy To Manage

Another advantage of a payday loan online is working with a loan through a personal account. Your lender provides you with an online account after your application is approved. In this entry, you can view your outstanding balance and the date of your next refund. You can also choose to pay the loan online through your account.

A payday loan is a great way to help you during financial crises. You don't need to worry about the insurance and you can also get paid in just a couple of hours. You may also apply online without having to go to the lender's office or call a loan officer. In addition, only basic conditions are required to obtain payday loans in emergencies.

Following payday loans, microloans will also increasingly be provided online. MFOs acquire the features of online banks mostly providing loans to the population similar to consumer loans for individuals according to MFOs. At the same time, from classic loans to salaries MFOs will not refuse because they will become their competitive advantage over banks. There is an objective and fairly high demand for this product from the population and reliable borrowers.

Taking A Payday Loan Algorithm

When filling out an application, a convenient interface of the service will be very useful. This will facilitate the operation. On the sites, you can fully consider all the rules and conditions for a loan application. Also, all services have a section with an online calculator that calculates the amount and period and provides the client with the full figure along with the calculation of interest. In addition, the service support service is ready to advise the client at any time of the day in a 24/7 mode.

How Do I Pay Off A Loan?

The usual average credit period is five, ten, and thirty days. Some services are ready to accept debt even after 180 days. When the deadlines are already running out and it is necessary to pay off the loan, the most important thing is to pay interest on it, and only then the loan amount itself.

Almost all companies provide clients with loyal conditions for deferred payment. But next time the client may be refused until the client pays the entire loan amount. Such services will certainly welcome the timely repayment of debt and accept funds through payment systems and self-service terminals.

Payday loans and other high cost loans are never shy of criticism. With MPs, such as Stella Creasy and public figures such as Archbishop Justin Welby regularly speaking out against the high cost loans and their high interest rates, often exceeding 1,000% APR.

For 8 million Britons that struggle with ongoing debt problems, payday loans do not necessarily provide a financial relief - and borrowing small sums of £300 or £500 can become a very costly process if debts are not paid on time.

In recent years, regulators and government officials have tried very hard to make payday lending extinct in the UK, or for the very least depowered. However, these micro loans serve as an anti-poverty measure for people who need to fill the gap until their next payday from work.

It started with an FCA meeting

Whilst payday was in its heyday in around 2013, the industry was worth an estimated £2 billion, served over 5 million customers per year and was served by over 200 UK lenders.

When the FCA became the regulator for the sector in 2015, it introduced new reforms such as a price cap, limits on fees and strict authorisation process to be able to trade. In a FCA meeting to other stakeholders in the loans industry, they highlighted their plans to have ‘only 4 payday lenders remaining in the industry’ - which at the time was deemed completely laughable and unrealistic, given the huge revenues and attention the industry was generating.

But, fast-forward 6 years later and this crazy concept is not so crazy any more.

Soon after the FCA took over, there was a huge drop off of lenders who simply could not make the business model profitable under the new price cap - and many were not able to meet the requirements of the FCA authorisation process.

The biggest impact has come from compensation claims and refunds from former customers. The FCA and Financial Ombudsman have allowed any customers who had trouble repaying their payday loans over the years. With high reclamation rates, individuals have been able to get reimbursements of just a few pounds to even several thousands of pounds, largely due to a lack of checks taken when their loan was approved. Perhaps they were already in debt, unemployed on benefits - or all of the above.

The result saw payday giant Wonga.com repay more than £500 million to previous customers which subsequently saw the company go into administration, swiftly followed by other huge players including The Money Shop, QuickQuid, WageDay Advance and many more.

Today, remarkably, there are only a handful of payday lenders left, but not enough for the product to go extinct.

What the experts have to say

Daniel Tannenbaum, who has over 10 years of working in the high cost loans industry and is currently the founder of Pheabs explains:

“It would be great to see payday loans becoming extinct, since these are high cost loans and whilst useful for some, others are far worse off after using them as a result. It would be great to see something else take its place.”

“People are unfortunately always going to be in debt and we have had alternatives for many years, whether it is credit unions or borrowing money from family or friends - but people prefer the quick and anonymity of payday loans.”

“I imagine for payday loans to be extinct, we need a really solid alternative. I would look towards the startup scene for this, since these are the more technology-driven companies who are more likely to raise millions upon millions of funding to really drive a new formidable product.”

“We already have some innovation in terms of salary finance, where you can draw money straight from your wages on demand and also some real growth in the peer to peer lending space. I think payday lending could become extinct if a handful of startups can facilitate a really strong alternative.”

You may have a situation where all you need is a small amount of money for a short period and you don’t want the hassle of too much paperwork, credit checks and having to provide collateral. 

In some situations, this simply isn’t practical, such as when you need to unexpectedly make car repairs or have some emergency dental work. In circumstances like this, applying for a payday loan may be your best option. Here are five good reasons to apply for a payday loan. 

1. Receive money quickly for an emergency

Same-day payday loans can be a good way of borrowing if you need a rapid injection of cash into your account for an emergency. A payday loan from Moneyboat can help you if you borrow only what you need and pay it back as soon as you can. It doesn’t take long to approve a payday loan and you can have funds in your bank account within 24 hours. 

This can be incredibly helpful in certain situations. If your car breaks down and you can’t do without transport, you can take out a payday loan without having to provide collateral or go through a credit check. 

When you quickly have cash in hand to pay for the repairs, there are no delays and you don’t have to suffer any of the negative consequences of not having transport, such as not getting to work on time. 

2. Enjoy the convenience of online application

When you’re faced with unexpected expenses, you want the easiest and most convenient way to access money. Many online lending businesses operate online and you can make use of their services 24/7. 

It is possible to get a payday loan online for an amount that usually ranges from about £200 to £1500. You will also typically have access to a personal online account where you can log in and see what you owe and your repayment dates.

Setting up automatic payments online can be convenient. Signing a continuous payment authority (CPA) means the lender can automatically take money from your bank account. 

If there isn’t enough money in your account to repay the loan on the due date, lenders can add late payment charges and try to get part payments. Reputable lenders won’t use a CPA more than twice because they realize how much financial stress this puts on borrowers. 

3. Face no restrictions on how to use the loan 

Many loans require you to state how you’re going to use your money but you don’t need to do this when you apply for a payday loan. Payday loans come with a time constraint and if you act responsibly, you can use the money however you want to use it as long as you pay it back on time. 

Some people will use payday loans to buy expensive gadgets or take holidays, while others will use them for emergencies and unexpected expenses. It’s best not to use payday loans for items you can’t afford, especially if they aren’t a necessity. However, if you can’t pay your utility bill and you don’t want to have your services disconnected, a payday loan could tide you over and give you the help you need when you need it most. 

4. Receive protection with fee and interest rate caps

There are those who complain about the high interest rates of payday loans but you need to keep in mind that lenders have to be compensated for the risks they take. The less they know about you, the more risks they face that they won’t get their money back. 

The Financial Conduct Authority (FCA) limits the amount of interest lenders can charge. If you pay back your loan on time, the cap on fees and charges helps to protect you. Daily interest and fees cannot exceed 0.8% of what you borrow and default fees can’t be more than £15 in total. Licensed payday lenders also have to clearly disclose their terms and conditions and if you read them, you will be aware of your responsibilities. 

5. Don’t miss a monthly payment with high interest rates and fees

A short-term loan could prevent you from missing a monthly payment which results in paying more interest fees and charges than you would on your payday loan. This can happen with things like credit card debt which attracts high interest rates. Making your credit card payment on time could help you to save yourself from extra fees and high interest rates charges. 

This won’t work if you don’t pay back the loan in time. If you don’t pay it back in time, the payday lender could offer you an extension or rollover, whereby you make a new agreement but this means you will have to repay more money in interest and extra fees.