As the word 'Instant' itself describes, an instant loan is a type of loan borrowed at a very short notice due to extreme urgency and for a short duration only.
Instant loan is borrowed when the borrower needs cash immediately. There is cap on the maximum amount which can be borrowed and is used for emergency. Due to limit on the maximum, the type of purchase through instant loan is also restricted.
Instant Loan: The Cost other terms
There is a misconception that to avail instant loan facility, a borrower must have excellent credit record. First of all, if a person has stellar credit history, most likely he can't be in a situation in which he would need instant loan to move out of that particular situation. Because if the person is maintaining good credit record, it indicates that excellent transaction is taking place through his account. So, such people would mostly not try for instant loans. However, whenever those with good credit record go for instant loan, loan providers provide the loan instantly. In most of such cases, loan providers do not perform credit check. Therefore, the conclusion is that irrespective of credit record, anybody who need loan can opt for instant loans and such loan providers offer instant loans without being influenced by the credit history. Nonetheless, credit record is definitely taken into account while deciding loan amount.
Second, instant loan providers are not in the business for charity. To survive in the market, they also need to earn profit through their business which in this case is lending instant loans to borrowers. However, earning profit does not mean exploiting borrowers' problematic situation. So, ideal rate of interest on instant loan is quite justified.
In case of instant loan, loan amount is based on various factors, which include source and amount of income, whether the source is permanent, credit history, ownership of property, vehicles etc.
Since, instant loans are meant for short duration and loan amount remains small, such loans have usually higher interest rate than most of the other loans. Some loan providers charge interest at the rate of as high as 500%. Therefore, it is advisable for potential borrowers to prioritize their urgent financial requirements properly before going for such instant loans. Because at time it becomes tough to pay 500% interest, though they borrow at such high rate of interest due to extreme urgency. To add further, loan providers charge extra fee for extension, if borrower is not able to pay during the decided term.
Searching Instant loans
Instant loans can be searched through both online and off line visit to loan providers. Before zeroing on a particular lender, borrowers are advised to thoroughly collate terms and conditions of various lenders. Since the loan term remains short, lenders charge heavy interest rate and rate varies from lender to lender. Through little effort, borrower can get quote from different lenders which facilitates choosing lender on the basis of interest rates, loan amount etc.
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