By Bradley Songer on November 22, 2010
.jpg.aspx?width=75&height=75) An instant loan is defined as a loan that is given to a borrower excluding any form of collateral from the borrower. This means that if you are borrowing money via an instant loan, you do not have to provide collateral. Collateral usually means putting up any of your property: for example, a home. Instant loans are also named ‘fast cash loans’ because you are given ‘fast cash’ without having to provide collateral for that money. Most lenders will require repayment of the loan within one month. However, this time period may be extended if the borrower agrees to pay an additional fee. Most lenders will work with your payment schedule and make the amount due after your payday.
Fast, instant loans are allocated to borrowers based on their qualifications. Different lenders have different criteria for the availability of a fast unsecure loan to a borrower. In general, in order to have the option to obtain a fast instant loan, you must have a steady source of income. However, other qualifications may include a proof of identity in the form of a social security card or driver’s license, proof of income in the form of a pay stub or an open checking/savings account.
Usually instant loans give small amounts of money to borrowers; lenders most commonly lend $100-$1000. It is possible, however, that a lender will give a borrower an amount of money as low as $50 or as high as $1,500. A service fee along with an interest fee is applied to all loans.
Instant loans have their advantages and disadvantages. One of their strongest advantages is that a borrower does not have to risk any collateral up front: they are given the money they require on the spot. The money they receive is essentially instant. Another advantage is that borrowers do not need to give out sensitive and private information: only proof of identity and proof of income is required. The money they receive is usually directly deposited into the borrower’s bank’s checking account.
Instant loans have their disadvantages as well. For one, instant loans have extremely high interest rates. Interest rates can reach as much as 400%, which is much higher than secured loans. Secured loans are car, mortgage or home equity loans. After the fixed term of your loan, the entire amount has to be paid back or you risk increased interest rates. Also, unlike secured loans, the interest on an instant loan cannot be deducted from your taxes. |