If you are currently in a difficult financial situation, then you may be thinking about taking out an instant loan to cure your money woes. Before you decide to do this, however, there is some important information that you should know. Browse through this list of FAQs about instant loans to find out more.
First of all, what is an instant loan? This is a common question, especially since instant loans are often referred to as a number of other terms. For example, they may also be called payday loans, cash advances, bad credit loans, and so on. Essentially, these are all types of short-term loans that are designed to give borrowers a quick answer to minor financial troubles.
When would I want to take out an instant loan? As the name implies, you may be considering an instant loan if you have incurred a sudden, unexpected expense or ran into financial difficulty without warning. This could be in situations from sudden large car repairs, a medical bill, or just about anything else you could imagine. Essentially, instant loans are ideal for situations where you need money and you need it fast.
How much money does an instant loan allow me to borrow? Generally, an instant loan may be taken out in an amount of up to $1,000. Each lender sets their own maximum limits, however, so do not take this as a blanket statement. Some lenders may allow you to take out slightly more, while others may have a lower limit. Furthermore, you should be aware that the amount of money that you are approved for is sometimes based on your income. Therefore, you will generally be approved for the amount equivalent to one paycheck.
How long are repayment terms on instant loans? Because instant loans are short-term and meant to be a quick financial boost, they are not intended to be paid back over a long period of time. Most lenders will want to have the loan repaid by your next paycheck, while some will give you a month or so to completely repay your loan. You can usually negotiate with your lender ahead of time to come up with repayment terms that will be feasible for you, but you should make sure that you are well aware of the repayment terms before you sign your name on the loan agreement.
Not to mention, if you miss payments or fail to pay back your loan in its entirety, you could be subjected to additional interest and fees. Furthermore, your loan could go into default, which can have a huge and negative impact on your credit score.
How can I take out an instant loan responsibly? Since instant loans are so easy to be approved for, it is extremely important that you borrow responsibly in order to avoid running into further financial trouble down the road. To do this, you should never take out a loan for more than you can comfortably afford to pay back. For example, you should not take out a $1,000 instant loan if you make exactly $1,000 per month. After all, this will leave you no money to cover other expenses aside from paying back the loan. Additionally, since you will be charged interest on the loan, you would not be able to pay it all back on time.
Doing some basic calculations ahead of time and cutting down unnecessary costs during your loan period are great ways to ensure that you will be able to pay the loan back within the given time period and that you do not end up in an even worse off financial situation than you started in.
How do I get approved for an instant loan? There is a simple loan application process that you will need to go through in order to be considered and likely approved for an instant loan. Most lenders have online forms that you can fill out and submit instantly for a decision. In most cases, lenders do not accept phone applications due to the risk of identity fraud.
Once your application is submitted, you will likely have your decision as to whether or not you were approved within a matter of seconds.
What are the requirements for taking out an instant loan? Being approved for a payday loan is a relatively simple process. The main requirement is that you must be employed. Furthermore, most lenders will want to see some kind of proof that you make at least a certain amount of minimum income each month. Finally, you must be at least 18 years of age in order to qualify for an instant loan.
What is considered “employed”? This is a great question, as not all definitions of “employed” are the same. For an instant loan, employment means having a part or full time job with a stable income. This can be anything from a traditional W2 job to even a freelance or self-employment gig. If you have no stable income, however, you will not be considered employed and thus will be unable to qualify for an instant loan.
What kind of interest and fees are charged on an instant loan? In order for your lending company to make any profit out of lending you their money, they will charge you a certain amount in interest and possibly other fees. The specific interest rate that you will be approved for will vary depending on the lender that you choose, the amount that you borrow, and even your past credit history in some cases. However, current interest rates can be as much as 900% or more.
If I am approved for an instant loan, how do I accept it? Once you apply for your loan and are approved, you should receive an e-mail message from your lender at the e-mail address you provided shortly after. This e-mail should contain further information as to how to officially accept your loan and get your money. Usually, this requires logging into an account on the lender’s website and accepting it that way.
Do I need to have a bank account to get my loan money? Yes. Since instant loan lenders typically wire you the money through a transfer, you will need a verified bank account in order to receive your funds. When you apply for the loan, you will likely be asked for a bank account and routing number, so be sure to have this information on hand and that you enter it correctly. If you enter your bank account information incorrectly, the transfer will not go through and you may end up having to wait an extra day or so to receive your funds.
How long does it take for my instant loan to transfer to my bank account? Once you are approved and accept your loan, it typically does not take any more than one business day for the money to show up in your bank account, provided that you entered your bank account and routing numbers correctly when you applied for the loan. In some cases, depending on the time or day and day of week that you applied for the loan, you could have the money that same day. Of course, you should not expect this and the amount of time it takes to transfer the money can vary based on your lender and your bank.
Can I contact you with more questions regarding instant loans? If you have more specific questions about your instant loan or applying for one, be sure to direct them towards your actual lender at the phone number and/or e-mail address that they have provided you with.