Why are instant loans so popular? Because they are much easier to apply for online than if you had to go and apply at a bank. Borrowing money from the bank is still a very long, complicated process demanding endless verification, stricter requirements and heaps of paperwork. The combination of these factors usually determines people to turn to instant payday loans. There is still a reluctance on the part of some people when it comes to applying for this type of credit. The benefits are not always understood, especially in case of an emergency, or of certain pressure influencing the decision to apply for a loan.
Instant Loans – The Advantages
Unsecured: While maybe not the most important advantage, it’s certainly up there when talking about a short-term loan. Not having to provide any collateral makes the whole process a lot easier. It is money you need urgently, not the additional paperwork involved in providing loan security.
No Credit Check: If you have a bad credit rating, banks won’t consider you. In the case of an emergency or a dire need, you simply could not get money. Take into account the aftermath of the Global Financial Crisis – there are still a lot of folks out there with tattered credit scores. Your credit score is not an issue when applying for an instant loan.
Silly Simple: When all you do is applying online – there are less face to face meetings. The basic requirements for an online same day loan application are somewhat less than what you have to prepare for a bank.
Speedy Process: If you have an emergency, then you want the money fairly fast. It’s pointless waiting a few days or a week to get money when faced with an urgent situation. The fact that the application is made online, in your own time, makes it quick. Couple that with an equally fast approval and you can understand why they call it an ‘instant’ loan.
Variations: The amount of money you can borrow on an instant loan is capped, but any amount between the minimum, $100 and the lender’s maximum is okay to apply for.
Flexible: Repayments are direct debits from your bank account. But that doesn’t stop you from paying it back faster with partial payments in between the repayment dates. The obvious advantage of this is the lower interest you will pay.
Instant Loans – Disadvantages
Costs: The charge for wanting a loan faster than a bank can provide is the higher interest rates. The justification for this is twofold: granting of unsecured loans (no collateral), and lending money to bad credit applicants. The higher rate covers these risks. Additional costs for an instant loan are about 30% of the total borrowed amount.
Repayment Time is Short: This is only a disadvantage if you are having trouble meeting the deadlines on the repayment schedule. Most people use the money to help them get through to the next payday. They have covered their expenses and their next pay will pay out the loan. So, it’s six of one and half a dozen of the other about short loan terms. Who wants a repayment commitment hanging over their head for months?
Finding the Lender
The internet has really simplified the process of obtaining a loan. You can go online to find the most suitable lending platform, apply, and then compare the terms and conditions from two or three options you have. Carrying out due diligence with lenders will help you avoid the more unscrupulous ones who want your personal details or will charge you exorbitant fees and rates. There are so many lenders out there that you can pick and choose to your heart’s content.
As a hint from us: always make sure the details of the lender are on the website address along with contact numbers. If there are no physical address or contact details, just move on to a site that provides all the information you require to make you feel comfortable and safe during the application process. Fees and interest rates should appear clearly on the site as well.
While there is some legal regulation with these types of loans, you will find that lenders, like Instant Loans 24, operate ethically and protect the interests of the borrower foremost. Sure, it’s business for them, but repeat business and recommendations are the best way for loan companies to be successful.