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6 Things to know about instant loans

6 Things to know about instant loans
6 Things to know about instant loans

this is sponsored content for Jacaranda Finance.

Realistically speaking, anything can happen in life. No matter how hardworking you are at work, there may be times when you may fall short of cash to cover some financial emergencies. Whether it's an unexpected car, home repair, or a medical bill to pay, taking out an instant loan allows you to borrow some cash in the fastest time possible.

Primarily, an instant loan refers to a personal loan that can be made available instantly. This means that the lender approves the application and disburses the funds in a few hours or within a day or two. Compared to a traditional personal loan, it's a type of loan intended for someone with an immediate need for credit.

If you consider getting instant loans, below are the six things you need to know about them:

1. Most instant loans are available online

With the advent of many modern innovations these days, most instant loans are accessible online. This means you can fill in an online application form with essential personal information. Depending on the lender you'll be working with, you may need to submit information about your income, Social Security number, bank account, and much more.

Once you've filled in the information, the lender will evaluate your application form and after getting approved, they'll deposit the loan proceeds into your bank account within a few hours or the next business day.

2. The loan amount may be lower than other personal loans

Depending on the lender you'll choose to deal with, you may be able to apply for a higher or lower loan amount. But, in most cases, the lender will have to consider your monthly income, existing debts, and other financial liabilities before you can be eligible for a certain amount of instant loan.

However, given the nature of an instant loan, which is an unsecured loan with minimal qualification requirements, the amount you may be able to borrow may be lower than what you expect. This all depends upon the lender you'll be working with, as well as your financial circumstances.

3. You may have to pay a higher interest rate

Typically, many instant loans are considered cash advances or payday loans. Unfortunately, these types of loans come with expensive fees, such as higher interest rates. This means that when you apply for an instant loan, you may have to pay an expensive interest rate on top of your loan amount.

6 Things to know about instant loans
6 Things to know about instant loans

On the other hand, depending on the lender you choose, these interest rates can be negotiated. For example, if you have a good credit rating, many lenders will not hesitate to offer you instant loans with cheaper rates. All you need to do is negotiate with them, and you can substantially reduce your repayment burden. This can be one of the best ways to secure your financial happiness and freedom in no time.

4. You may have a shorter repayment term

Unlike the regular personal loans, you may have a shorter repayment term when you take out an instant loan. For instance, most instant loan lenders allow you to repay what you borrowed within the 60 days after the application or upon receiving your next pay check.

However, while most quick loans come with shorter repayment terms, there are lenders who may allow you to pay off the whole outstanding balance in a few months, particularly in six months. Thus, if you want to get the most out of a flexible repayment term, be careful in choosing the right loan lender.

5. Instant loans require minimal documentation

Compared to other personal loans, applying for an instant loan doesn't need a lot of documentation. Since most of them are available online, you may only be required to submit a few documents for verification.

For example, the lender may only ask you to submit a proof of your regular income as the basic requirement for eligibility. This means a more detailed background check isn't necessary before you can get approved for an instant loan.

6. You may be approved despite having bad credit

Generally, instant loans are more attractive to people with bad credit. Most lenders don't consider credit scores or reports as a primary qualification requirement. Thus, if you have bad credit as of the moment, you may still get approved for an instant loan without a hitch. Your lender doesn't focus on your credit score, but, instead, consider your repayment capacity when deciding whether to approve your loan or not.

Bottom line

Indeed, applying for an instant loan doesn't need to be challenging if you're aware of the things mentioned above. The more you know about how this type of loan works, the more you can get the most out of its benefits to your financial situation.

Therefore, if you believe getting an instant loan can help you, start looking for a reputable lender who can offer you the best loan deals you can imagine.