Overnight loans are generally applied for, and approved, when a potential borrower applies with an online lender and is funded very quickly. These are usually payday loans for 1500 dollars or less. However, lately we’ve been seeing loan applications filled out and submitted overnight and a 24 hour approved disbursement up to $3000 is funded by the time the sun rises. Sometimes as high as $5000 as well. $10K and you are pushing it for sure. Some of the newer lenders this year are approving loans faster than every before – even without collateral.
These kinds of loans are not so easy to find anywhere – including your local banks conventional lenders, and the so-called online lenders. There are very few in existence.
Note: for the remainder of this post, the term “overnight” may be signified with the acronym ON on, in bold and capped text.
There are some reputable banks and lending institutions that provide the odd overnight loan, but generally for smaller amounts, and these kinds of micro-loans are usually under 3000 dollars. Your average quick, 24 hour loan, is for even less than that – more like 1500 or 1000 dollars total. When it comes to fast personal loans you are generally going to be seeing payday loan companies flogging their high-yield products.
In short, the fastest overnight loan you can get is online, and it’s usually for less than 500 dollars. What we want to talk about in this article, is getting an overnight loan for higher amounts, such as 10000 dollars, 5000 dollars, and 3000 dollars – and I mean non-payday loans and/or cash advances.
Interest Rates on Overnight Loans
When you get an overnight loan there is an interest rate issue (or APR issue). We need to discuss this here before we set out to present the possible approval of a 10000, or 5000 dollar loan. Without question the credit bureaus will be contacted digitally to check out your credit rating and FICO score.
It doesn’t matter if you are applying online in the wee wee hours of 1 AM, 2 AM, or 5 AM – your application will be processed during normal business hours. Statistically speaking, most borrowers apply between 9:00 AM and 1:00 PM, Monday – Friday, and the vast majority of applications are processed by staff members during typical business hours. So in short, if you want an overnight loan approved, you better have the application filled and submitted by 9:00 AM EST (Eastern Standard Time).
Back to the issue of your credit score. If you want to be approved overnight for funding, and I mean having the money deposited into your checking/savings account the next morning, y0u better be prepared to pay an interest rate that is quite high. If your credit score is fairly low (such as a FICO score between 500-600) you can expect an APR of between 10% and 20%. I’ve actually seen higher interest rates from overnight lenders than that – imagine that! In that case don’t bother.
Math on a $3,000 Dollar Overnight Loan
A 3000 dollar loan applied for and approved overnight, or in one 24 hour period is the most common for loans over $1500. Here we will do some math on a typical overnight loan for 3000 dollars. Note the principal loan, the interest rate costs, and compare that with the 10000 dollar loan and the 5000 dollar loan presented below. When I say desperate, I really mean it, because borrowers who need money that fast have to be desperate.
ON Loan Amount = $3,000
Interest rate on ON loan = 12%
Payment Schedule on ON loan = biweekly (payment every 2 weeks or 5 days)
Length for total ON = 2 Years
Cost on a 3000 dollar overnight loan
Total Amount to be paid on ON loan = $3,366.92
Total amount of interest ON loan = $366.92
Payments every 14 days or two weeks on ON loan = $64.57
Note that for this overnight loan of 3000 dollars the total interest to be paid over the 2 year term is three hundred sixty six dollars and 92 cents. The payments every 2 weeks (or fortnight; or 14 days if you prefer) are sixty four dollars and fifty seven cents. Not a terrible cost of borrowing, but it could be much less or much more – depending on opening and closing fees. Not to mention the cost of penalties for missed payments and the like.
Math on a $5,000 Dollar Overnight Loan
A 5000 dollar loan applied for and approved overnight, or in one 24 hour period is not as common if you look at the statistics for personal loans given out over a 24 hour time period, but nonetheless we should calculate these results as well. You can see below that the cost on this 5000 dollar loan is going to be much more than the 3000 dollar loan example above. See the 22% interest rate and the 3 year overall term of the loan.
ON loan Amount = $5,000
Interest rate on ON loan = 22%
Payment Schedule on ON loan = monthly (payment end of every month)
Length for total ON loan = 3 Years
Cost on a 5000 dollar overnight loan
Total amount to be paid: $6,695.52
Total amount of interest $1,695.52
Notice that in this example the borrower is on the hook to the lender for interest costs of one thousand six hundred and ninety five dollars and 52 cents. The borrower’s payment comes to a total of one hundred and eighty three dollars and forty four cents. I know that this is more expensive in regards to a 24 hour loan, but I’ve seen worse than a 22% APR before.
Math on a $10,000 Dollar Overnight Loan
Now for the big daddy of all 24 hour loans – the 10000 dollar overnight loan. In this example the lender is giving our borrower a very reasonable interest rate of 6% on the buck. Here you will see that the payment schedule is once a month as in example #2. The length of this overnight loan is 5 years which will mean the lender will do quite well on the this product.
Overnight Loan = $10,000
Interest rate on ON loan = 6%
Payment Schedule on ON = monthly (payment end of every month)
Length for total ON = 5 Years
Cost on a 10000 dollar overnight loan
Total Amount to be paid on ON = $11,524.7
Total amount of interest paid on ON = $1,524.71
Monthly Payments paid on ON = $189.45
See how the total interest paid on this overnight loan is one thousand five hundred and 24 dollars and 71 cents. The monthly payments are fairly hefty at one hundred and eighty nine dollars and forty five cents.
What to Watch Out For When Applying For an Overnight Loan
Whenever you apply for an overnight loan you have to make sure that you are dealing with a reputable lender. A legitimate overnight lender will charge you a reasonable APR on the funding, and they will never ask you to make ANY kind of payment up front. We at CLF have been trying to pound this warning home more and more lately as we have been hearing about some loan shark companies asking for some kind of fee, or opening payment.
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