Same-Day Loans: How They Work And Should You Get One?


Same-day loans can help you if you need money quickly for an emergency purchase. However, they can also haunt you down the road as some types force you to pay extremely high interest rates and fees. Follow along as we dive into how same-day loans work and whether they’re right for you.

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What Is a Same-Day Loan?

Same-day loans are pretty much exactly how they sound. They are loans that allow you to apply, qualify and receive funds on the same day. 

While several types of loans can be same-day loans, they are often collectively referred to as emergency loans because they’re usually used as a last resort when you’re in a pinch. That’s because they sometimes come with fees and interest rates so high that you’ll want to consider almost every other option before applying. 

However, if you find yourself in a tough spot and need money by the end of the day, a same-day loan might be your only real option. 

How Do Same-Day Loans Work?

You can receive a same-day loan from several sources, from traditional ones such as banks, credit unions and online lenders, to alternative sources such as pawnshops. Below are some of the most common same-day loan options. 

Same-day personal loans

A same-day personal loan is one of the best options if you need cash quickly. Personal loans are generally unsecured, meaning you don’t need to provide collateral to receive the loan, which saves lots of time on the approval process. The main information the lender (usually a bank, credit union or online lender) will need is your credit score, debt-to-income (DTI) ratio, employment history and income level. The specific financial information required will depend on the lender. 

Same-day loans typically allow you to borrow between $2,000 to $45,000, but don’t forget that you will most likely have to pay higher interest rates and fees on this money. Personal loan interest rates start around 11%, but can be higher if you have bad credit. 

Personal loans are fixed-rate loans with relatively short-term lengths compared to other loans like mortgage loans. In general, you can expect to make equal monthly payments for between 1 to 5 years to pay off the loan. 

Payday loans

As the name suggests, payday loans are designed to get you just enough money to last until your next payday, meaning you typically have to repay the loan within 2 to 4 weeks.

The loan amounts are usually $500 or less but come with huge interest rates that force you to pay a hefty price to get a relatively small amount of money. Payday loans typically cost between $10 to $30 for every $100 borrowed, an astronomical amount of interest compared to other types of loans. For example, if you pay $20 per $100 for a payday loan due in 2 weeks, your annual percentage rate (APR) would be over 500%. 

Pawnshop loans

Pawnshop loans are secured loans, meaning you must provide collateral to receive the loan. While you may have to risk losing a valuable asset, pawnshop loans come with much fewer requirements than other loan types. Pawnshops will not check your credit, income or employment status; the loan is based solely on the collateral you provide. This simple loan process makes it much easier to complete in a single day. 

You pay for these lenient loan requirements with interest rates as high as 20% to 30% and APRs around 200%. While pawnshop loan amounts typically average around $180, fees this large can still add up. Pawnshops also typically only offer 25% to 60% of the collateral’s resale value, so you will not receive nearly as much as the item is worth. 

Title loans

Title loans are also known as auto title loans because they require you to use your car as collateral for a same-day loan. Your car is only eligible if you own it outright. 

This loan will allow you to borrow up to 50% of your car’s appraised value, but you typically have to repay the loan with interest within 30 days. With interest rates around 25%, repayment can be challenging. But if you don’t repay the loan, the lender may repossess your car. 

Cash advances

A credit card cash advance is essentially a loan from your credit card company. Instead of using your credit card to make a purchase, you use the same line of credit to withdraw cash. This withdrawal comes at a much higher cost than a traditional credit card purchase and is subject to much lower limits than your credit limit, so it’s wise to use this option sparingly. 

Unlike your credit card that gives you a 30-day grace period before charging you interest, cash advances can charge around 5% of the amount of the advance immediately and can compound daily.

Pros and Cons of Same-Day Loans

Let’s look at the potential benefits and downsides of same-day loans.

Fastest timing from application to funding

Low borrower requirements

No restrictions on how you use the funds

High interest rates and fees

Short loan terms make it harder to repay

How To Get a Same-Day Loan

The typical steps to get a same-day loan include:

  1. Organizing your finances to determine how much money you need
  2. Researching and comparing lenders, with a focus on the APR they charge
  3. Filling out a loan application
  4. Receiving the funds on the same day you applied
  5. Paying back the loan within a relatively short period of time, ranging from days to several years

These steps will differ depending on the type of loan and whether you are applying for an online same-day loan or are applying in person. Make sure you have the necessary financial information that lenders may need for your application, including your credit score, income, proof of employment and proof of identity. 

Getting a same-day loan with bad credit 

It is possible to qualify for same-day loans with bad credit. If your credit history includes some missed payments or even bankruptcies, your best option may be a same-day loan that doesn’t require a credit check, such as a pawnshop loan. 

You may even be able to get a personal loan with bad credit if you provide collateral to secure the loan or get a co-signer on the loan alongside you. 

Alternatives to Same-Day Loans

  • Home equity loans: If you have built up equity in your home (the difference between your home’s value and how much you owe on the home), you can exchange it to receive a much larger loan than a same-day loan – at a much lower interest rate and APR. However, the application process takes much longer and typically has stricter requirements than same-day loans.
  • 0% APR credit card: This type of credit card gives you an introductory period between 6 to 24 months when the lender won’t charge you interest. If you pay off the balance before this period ends, you can fund a large purchase without additional charges. However, these cards also typically take longer to qualify for and have stricter requirements than same-day loans.
  • Emergency savings: If you’ve responsibly contributed to an emergency fund, it might be wise to use it before applying for a same-day loan. While you may be hesitant to dip into your emergency savings, the high interest rates and fees for same-day loans may deplete it anyway, so it’s best to avoid them if you can.

Final Thoughts on Getting a Same-Day Loan

If you’re in a tricky financial situation and your last remaining option is a same-day loan, a same-day personal loan may be your best option. If your situation has not quite reached the level of an emergency, it is best to avoid potentially predatory loans such as payday and title loans.

No matter what loan you choose to apply for, make sure to carefully consider your financial situation and research all options before applying for a loan.

See What a Personal Loan Can Do for You

Our partners at Rocket LoansSM are ready to help.
Checking your options won’t affect your credit score.

  • Same-day loans can get cash in your pocket on the same day that you apply for it
  • Many same-day loans come with high interest rates and some can even be considered predatory
  • Same-day loans are typically used as a last resort when you need cash in an emergency situation

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