When a medical emergency, car accident, or damage to your home occurs, and you don’t have the funds to cover costs, panic sets in. Where do you find the money to cover an unexpected expense? You can apply for an instant loan online.
More people are learning that applying for an instant loan online is a quick way to get emergency money. In the U.S., 40% of the population has no cash, savings, or credit card ability to cover an unexpected $400 expense. About 27% can borrow or sell an asset to get money, and an additional 12% cannot cover the expense.
When you need money, an online instant loan can solve your money problems fast. Check out this guide for five critical facts about requesting an online instant loan.
Applying for an instant loan online is quick and easy. When you visit a website for online loans, they will have you answer questions about your financial status, loan needs, and contact information. This will include verification of your address, social security number, income, residency, and more.
The main factor in receiving approval is filling out the application completely, ensuring you answer all questions and include any requested documentation. Once the company analyzes your application, it will recommend a lender that meets your needs.
Once the lender approves your application, they will deposit the loan directly into your bank account, usually the next business day.
These are unsecured loans, meaning there is no collateral requirement.
Collateral is necessary when a loan is secured. When a loan is secure, there is less risk because the bank has something to take from you in case of a default. For instance, a car loan uses the vehicle as collateral; a mortgage uses the home as collateral.
With an unsecured personal loan, the bank can confiscate nothing of value if you default. Since it is a high-risk loan, the lender charges a higher interest rate. Banks, Credit Unions, and other financial institutions will evaluate your income and credit history before deciding on your application.
Many reputable online companies will accept your application and recommend a lender meeting your needs. This makes a loan possible even if you have a poor credit rating.
The best instant loan gives you the cash you need at the lowest interest rate and the best terms possible. A wide variety of instant loans come under different names—personal unsecured, payday, emergency, and credit card advances. Because loans are unsecured and applicants often have a low-to-fair credit history and rating, these loans are high-risk.
Payday loans are small loans, often $500 or less. You must repay the loan in full with your next paycheck.
Lenders charge between $10-$30 for every $100 you borrow. This equals a 400% annual percentage rate (APR).
Credit card advances are quick and easy to receive but also have an exceptionally high-interest rate. The amount of money you can borrow is limited to the amount on your credit card. There is no grace period, meaning interest begins accruing when you have money.
In addition to an interest rate between 17% and 29%, the credit card will also charge a fee between 3% and 5% of the amount you withdraw.
The cash advance will show on your credit report as a high-balance credit card, not a bank loan. If you use this method to borrow money, pay it off quickly.
Personal loans are not tied to a paycheck, credit card, or collateral. Based on the size of your loan, payments are monthly for 92 days to 72 months. Depending on your income level and prior credit history, you may obtain a loan between $100 to $35,000 with an interest rate between 5.99% to 35.99%.
Many lenders skip credit checks when you apply for an instant loan online. This prevents a hit on your credit rating.
Many people seeking emergency cash loans have a low-to-fair credit rating. When you apply for a credit card or any type of financial assistance, such as a student loan or bank loan, that financial institution runs a hard credit check.
Every time a hard credit check is run, it has a negative impact on your credit rating. Too many hard checks and lenders will believe you are short on money or overspending.
Your FICO score is how lenders rank your ability to repay a loan. FICO scores range between 300 to 850. Sign up with Credit Karma online to check your score and receive email updates when it changes.
Depending on your score, lenders rank you as:
An online loan is a perfect solution if you need cash to get through a financial crisis. By making timely payments, you will improve your credit rating.
Instant loans are convenient and great for quickly putting cash in your hands, but there are some negative aspects to consider.
Depending on the type of loan you apply for, the amount may be low. This will depend, in part, on your income and debt ratio.
The more limitations there are because of your circumstances, the more limited your selection of lenders. Dealing with a small selection base may be necessary if you have several factors reducing your chance of approval with a traditional lender.
If you have a poor to fair credit rating, you will likely pay high interest rates with a short payoff period. This varies among online lenders, so shop around.
If you need fast cash, there are many benefits. Online loans are well-known for helping people with less-than-stellar credit.
The application process is easy, and there isn’t a long waiting time to receive your money. Everything is done online, so no time is taken off work to meet with a loan officer. The funds go directly into your bank account.
Lower loan amounts with fixed interest rates make it easier for people on a budget to make timely payments. This helps to improve their credit rating, making it easier to borrow money in the future.
If you need cash now, an online emergency cash loan is quick and easy compared to alternative money-raising methods. Selling possessions or getting a second job takes time you don’t have.
If you need cash quickly, you can apply for an instant loan online at Fast Loan Direct. It only takes a few minutes to complete our online application.
We will review your needs and connect you with a suitable lender. Once the lender approves your application, they will deposit funds into your bank account as early as the next business day.