Financial emergencies will not wait until you manage to arrange cash, and therefore, loans seem to be a possible way for an instant injection of cash. Various types of loans are out there, but not all of them are instantly available. Borrowing is subject to a few formalities, such as your credit check and repaying capacity, that serve as the basis for the lending decision. It may take three to four days to process your application for a personal loan. It takes even more when you apply for a secured loan like a mortgage.

Bear in mind that you will need immediate access to funds during emergencies such as those related to your health. Lenders have made it easier for borrowers to get money the same day. These loans are called instant decision loans. They are small cash loans required to be paid off in full on the due date.

These loans start with as little as £100 and reach up to £1,000. A few lenders may offer you an instalment repayment plan, which can be weekly or monthly, depending on the borrowing sum.

Is there any possibility to get money this instant?

Yes, you can get money instantly or on the same day. Lenders use advanced technology to shortlist your application and give you decisions in minutes. However, same-day approved loans are often subject to a credit check. It means no hard inquiries are made, and therefore, you do not lose any credit points.

Since a lender cannot get to know about your payment history, they will charge you high interest rates. Same-day loans are expensive. After submitting your application for an instant loan, you will get money within 15 minutes in your bank account.

These loans do not involve any formalities like a credit check and submitting your bank statement. Your lender will ask for your financial details in the application form. The following details help them decide how much money they can actually afford to borrow:

• How much you earn every month
• Average monthly pending
• Existing debts
• The number of dependents
• Fixed expenses

It is vital to provide you with as accurate details as possible. A lender will decide on the lending amount based on the details you provide. You do not need to arrange for a guarantor to get signed off on, and therefore, these loans are called loans with no guarantor.

These will be short-term loans and match perfectly when your finances require quick funding to your account.

Are instant loans expensive?

Instant loans are undoubtedly expensive. Interest rates are capped at 0.8% per day, which makes the annual interest rate 292%. This means that if you borrow a hundred pounds and do not pay off your debt until a full year, you will have to pay £292 in interest on top of £100.

Do not forget that fees are charged separately. This is why financial advisors recommend paying attention to the annual percentage rate, which includes fees and other charges. It can be up to 1500%.

Are instant loans accessible when you are unemployed?

When you lose your job, you will have to rely on your savings to meet your expenses. There are some benefits available from the government you can apply for as soon as you lose your job. If you qualify for them, you will get benefits for six months. These benefits are called unemployment benefits. Make sure you land a job within a span of six months.

However, sometimes you come across some unexpected expenses. Chances are your savings do not have sufficient funds to meet them. Borrowing is not an option to meet your costs because you do not have a full-time job, but since you are on benefits, you can treat them like your income. If you are on benefits and need a loan today from a direct lender, you can use instant decision loans. A lender will decide the amount of money based on your benefits.

Benefits and drawbacks of instant loans

Here are the benefits and drawbacks of instant loans:

• The application process is quick. You will get money the same day you put in the loan application.
• These loans are perfect to meet unexpected expenses as there is no risk of a credit check.
• Even unemployed people can apply for instant loans. Their benefits will be considered your income.
• You do not need to arrange a guarantor and collateral despite your having a bad credit rating.
• These loans are more expensive than any other loans. You will end up being up to your neck in debt if you struggle with payments.
• Missed payments can wreak havoc on your credit score. It will be more difficult for you to borrow money at affordable interest rates.
• You will have to pay additional fees along with interest. In case of late payments, you will have to pay late payment fees as well.

Precautions you should take to apply for instant loans

Here are the precautions you should take while taking out instant decision loans:

• You should carefully examine whether the lender you are borrowing from is registered or not. You should always try to borrow money from a lender registered with the Financial Conduct Authority. You can get the registration details of a lender on their website. Registered lenders also mention the registration number on their website to make people believe that they are registered, which you can cross-check with the registration number given on the lender’s website.
• Check you can afford the repayment. Most of the time, instant loans are paid back in full. It can be quite hard to repay your debt on time. Even if you have to pay back the debt in fixed instalments, look over your budget. Avoid borrowing money when you cannot meet essential expenses along with them.

The bottom line

Instant decision loans are available on the market, particularly aimed at bad credit borrowers to meet emergency expenses. However, these loans are quite expensive, so you should carefully analyse your repaying capacity before using them to prevent yourself from falling into debt.

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