What are instant loans? It seems that every website you check in search of an answer offers a slightly different definition, with seemingly tens of different names for what is the same financial product. Let’s provide a clear cut explanation as to what instant loans are, what they aren’t and how they work.
What are instant loans? – A brief overview
An instant loan is a form of short term credit that typically lasts for between 1 and 6 months. Other names that instant loans are associated with include bad credit loans, payday loans and quick loans.
The speed with which an instant loan application is processed, as well as the timescale of funds being sent following loan approval, are the reasons why this form of finance is considered ‘instant’.
CashLady instant loan applications take just 5 minutes, with approval provided instantly. Where an application is approved the funds can be available on the same working day – sent directly to the applicant’s bank account.
What are instant loans?: A brief history of instant loans
When trying to answer the question What are instant loans it pays to look at the evolution of the market.
The history of instant loans can be tracked all the way back to the late 19th century when American workers were allowed to access loans which would be repaid upon receiving their monthly wages.
Instant loans in their modern form began in the 1980’s – originating in the US where a market-wide deregulation of interest rates gave rise to many players entering this market (this was as a result of the Depository Institutions and Monetary Control Act of 1980). These relatively small loans provided consumers with financial flexibility – allowing them to access money when it was needed quickly and easily.
Today, instant loans are faster and easier than ever before – they’re available online and don’t require ID (as this part of the application is handled with online checks). Funds are typically with the consumer on the same day.
Whilst the Payday market is traditionally associated with loans that last 30 days, in fact, the range of products in this sphere is far more expansive. CashLady, as an FCA Approved Credit Broker, connects you with the right lender, and the right financial product. This includes instant loans, but may also include:
- Payday loans
- 1 – 6-month short term loans
- Line of credit
- Guarantor loans
How does an instant loan work?
Representative APR: 1272%
Amount borrowed: £250 for 3 months
Number of repayments: 3
Interest rate p/a: 292% (fixed)
Each repayment amount: £137.21
Total amount repayable: £411.63
For a more in-depth understanding of how instant loans work, read our guide: Instant loans online.
What are instant loans: Key questions about instant loans
Beyond What are instant loans? you may have many more questions, such as the following which are frequently asked by consumers who, like you, are considering using an instant loan. For more answers to common questions, read our FAQ section.
What will I need to apply for an instant loan?
When applying for an instant loan through CashLady you’ll need:
- Your address
- The details of your employer’s business name, address and contact details
- Your basic contact details (such as your email address and mobile number)
- Details of your monthly outgoings
- An active email address
- An internet enabled smartphone or a touchscreen device (to sign the loan agreement)
- A debit bank account
I have bad credit. Can I still apply for an instant loan?
Yes – this form of short term finance involves limited amounts (CashLady connects you with lenders willing to lend between £80 and £500). This makes instant loans suitable for consumers with less than perfect credit. You can see an overview of credit scores on the spectrum from ‘Excellent’ to ‘Very poor’ below.
Image source: 1st UK mortgages
Can I delay a repayment on my instant loan?
Most lenders will allow you to delay or ‘rollover’ a payment on your instant loan. However, all providers that agree to this will have a limit on the number of times you can do this.
Find out your instant loan options with CashLady – Apply Now
Why use an instant loan?
Now that we’ve answered ‘What are instant loans?’ we should look at why you may use one and what the advantages are to choosing this form of credit.
Consumers typically choose instant loans as they’re a fast, short term form of finance that is perfect for emergency situations. This could include:
- Paying an overdue bill
- Covering a medical bill
- Paying for a loved one’s funeral
- Repairing a vehicle
- Repairing a property or an appliance
- Covering an unexpected period of delayed income
When choosing to use an instant loan, and when used responsibly, you look forward to a number of benefits, including:
- An effective solution for repairing poor credit
- Rapid payment of funds – typically you can expect to receive the funds within hours rather than days
- A super-fast approval decision – almost instantaneous
- A process handled completely online with an ‘e-signature’ to sign the loan agreement
- Flexible payment conditions and the ability to roll your payments over in some cases
- An option to repay early without having to pay extra charges
For a more in-depth idea as to the benefits of instant loans, read our guide: What are the benefits of instant loans?
Who uses instant loans?
Instant loans may have begun with US workers, today, however, they are used by a diverse collection of people from every walk of life. The image below sheds some light on the types of consumers using instant loans today.
Image source: Cash Float
Should you need further advice and guidance to understand how an instant loan works contact the CashLady team. We’re available via our contact page, through our live chat feature and on the email address below.
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