Pros and Cons of Applying for Instant Loans

Pros and Cons of Applying for Instant Loans

It’s natural to come across unexpected expenses that require you to take action immediately. However, if you do not have enough funds to deal with an emergency of this nature, getting an instant loan may be a way out.

Instant cash loan
Instant loan

What Is an Instant Loan?

As the name implies, instant loans are loans that are often approved instantly, given that you fulfil certain eligibility requirements. The best part about them is that they can be much easier to apply for, compared to traditional loans that take a long time and require a good amount of documentation.

An instant loan is also called a quick or personal loan. While it’s not hard to find lenders for such loans, instant loans from Jacaranda Finance offer some of the best terms tailored to your needs.

What Are the Benefits of an Instant Cash Loan?

In times of need, instant loans can be a sigh of relief. Here are some more benefits associated with them.

The application process can be easy

One of the best things about this type of loan is that it can come with a super easy and quick application process. It is also possible to apply for them online within just a few minutes of the expected completion time. If you’re lucky enough, you can also get your instant cash loan within a day, given that you fulfil the criteria and apply during business hours.

The approval time is fast

Emergencies always come unannounced and being out of cash at the time can make matters worse. A situation of this nature requires you to get funds immediately and this is where instant cash loans can be a handy option.

Apart from an easy application process, they often require much less time to get approved. This is because lenders who deal with instant loans don’t require as much documentation compared to lenders who deal with other types of loans. This way, your application gets processed faster and, if there are no discrepancies, the approval is likely to take place in a day or two.

The funds come right away

Since an instant cash loan does not consist of a huge amount, you can often get it almost immediately. Depending on the bank you are with, the amount you’ve applied for is usually transferred into your bank account or provided in the form of cash within seconds or minutes.

It helps you deal with medical emergencies

Unless you have health insurance, it's often not possible to deal with an expensive medical emergency with just your savings alone. Moreover, there are often strict deadlines to deposit the required amount before any medical facility treats a certain condition. If you find yourself in such a situation, an instant loan can provide some form of financial relief.

You can also get it if you have bad credit

Unlike other loans that give you a hard time with a bad credit history, an instant cash loan doesn’t. This is partly because of the fact that traditional lenders have very stringent rules in place as opposed to instant lenders.

In most cases, traditional lenders require an excellent credit score. This is because credit scores can be an important determinant of how much interest you'll pay on the loan.

If you have bad credit, it can get in the way of getting a loan for big projects, house, or car. Luckily, that is often not the case with instant loans. They have fewer hoops which is why lenders don't hesitate to provide them.

They often don’t require collateral

The case with some loans is that you may need to provide collateral for security. The lender may ask you to put up your car or property as collateral. However, that is often not the case with an instant loan.

Typically, it does not require the same amount of security as other types of loans. However, it also depends on the amount you’re applying for. If it’s high, the lender may ask you to put something up as security, but the chances of this happening are on the lower side.

What Are the Costs of an Instant Cash Loan?

While there is no doubt that these loans provide instant relief in times of crisis, they also accompany certain drawbacks, including:

They may affect your credit file

Even though it’s quite evident, people choose to ignore the fact that no matter the nature of this arrangement, it is still a form of credit and can affect your credit score in the long run.

They can come with high interest rates

Since an instant loan comes with a short loan term, lenders may charge you a high rate of interest. However, the fact that they are flexible with credit scores can work out both in and against your interests.

This is because the idea of applying for a loan may seem attractive due to its accepting nature, a bad credit score hardly gets anyone good terms on the loan. As a result, you can end up accumulating debt you can’t pay for.

However, there are ways to avoid a situation where your debt creates a financial crisis. Start by always paying on time.

Secondly, consider the pros and cons of both unsecured and secured fast loans before making a leap. However, with a secured loan, your interest rate may be lower as compared to an unsecured loan.

In the end, you must consider whether you can repay the borrowed funds comfortably before getting yourself into a tricky situation. Even though the pros of an instant loan clearly outweigh the cons, it doesn't take long before you land yourself in debt due to high interest rates and missed or late payments. Eventually, the inability to pay on time results in further repercussions.

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