In times of a financial pinch, instant loans might seem like a blessing in disguise and just the thing you need. However, before you take the big step, there are things you should be aware of.
Although many lenders use the flashy name “instant loans,” a great number of these advances are, in reality, no different than payday loans or cash advances, which are loaded with complex terms and have considerable eligibility requirements. Moreover, even when approved, you most likely would not get the cash instantly. Do you see now – there are a lot of grey areas related to instant loans that require adequate exploration and consideration.
Therefore, to help you make an informed decision, Jacaranda Finance shares some most essential things everyone should know about instant loans.
So, without further ado, let’s begin.
What Instant Loans?
Put simply, instant loans are, in general, short-term advances that do not necessitate a credit check. They might sound super convenient, but before applying for one, we strongly believe everyone interested should be aware of how they work, as well as their eligibility requirements.
In addition to this, the amount one can borrow is usually small, and the loan typically comes bearing high-interest rates. And as mentioned earlier, borrowers might not actually get their money ‘instantly’.
Keep reading on if you would like to learn more about instant loans.
What Should Everyone Know About Instant Loans?
#1: How instant loans work
Generally, interested individuals can fill out an instant loan application either online or in person. The application form outlines the amount one wishes to borrow as well as the repayment period.
In addition to this, applicants will also have to provide personal information and other details, such as Social Security number, debt history, income details, email address, bank account information, etc. Keep in mind that the required info varies from lender to lender.
Once the application is submitted, the lender generally promises to respond within a few minutes and transfers funds into your bank account if the application is approved. But in some cases, even if you’re approved, the fund’s transfer might take a business day or two – at times even longer.
#2: Instant loans involve high interest rates
As shared above, numerous loans marketed as “instant loans” are actually payday loans or cash advances, which are infamous for bearing high interest rates. We understand that you have or most likely will consider instant loans because it’s urgent. Nonetheless, we strongly recommend you weigh the pros and cons of this loan in the long run before making any decisions.
#3: Instant loans are generally small
This is not the kind of loan you should consider taking if you wish to fund a major home improvement project. With instant loans, the amount you can borrow is typically low because they are usually viewed as emergency loans. Hence, if you need more money, we suggest you consider other alternatives.
#4: Instant loans are not always “instant.”
Although the instant loan application process might be faster in person, it generally takes around a few hours to a few days for a lender to make a final decision about an application received online.
Moreover, if approved, the deposit of funds to your bank account might also take time. For instance, if you submit a request for an instant loan after a particular time of day, you might not receive the funds until the next working day. It might take even longer in case the lender needs more details from you.
#5: Instant loans usually have a short loan term
Just like payday loans, instant loans too generally have a short loan term. For instance, you might have to return the borrowed money within a week or two or as soon as your next payday. This might not provide you substantial time to get the funds together for repayment.
#6: They might be good for people with bad credit
More than often, instant loans are appealing to individuals with less-than-perfect credit scores as several of these lenders do not go through credit scores or credit reports. We are sure this might appear tempting, but it is important to remember instant loans will not help you build credit as the lender does not report the payment history to the chief credit bureaus.
Final Note
As instant loans come bearing short repayment terms and high-interest rates, it might not be an ideal choice for everyone. But for those who can deal with its requirement, these loans can be just the thing you are looking for.
In case instant loans are not for you, do not worry. There are several other alternatives to choose from, including personal loans, payday alternative loans, credit card cash advances, etc.
