What are instant loans?

What is an instant loan?

An instant loan is money you can borrow quickly when you need it. Although the term is used to describe various loan types (unsecured or secured), they are typically personal (unsecured) loans due to the quicker application turnaround.

These loans are called ‘instant’ because you can often get the money on the same day you apply for it. Some lenders even send the money to your bank account within minutes or hours after they approve your application.

What are instant loans for?

Instant loans help when you have a money emergency and can't wait. Here are some common reasons people use instant loans:

• To fix a broken car that you need for work
• To repair something important in your home, like a boiler or washing machine
• To pay an unexpected bill
• To cover costs until your next payday
• To help with a family emergency

Remember that instant loans are best for urgent needs, not for buying things you want but don't need. This is because instant loans often come with much higher interest rates than other types of credit, meaning you’ll repay more overall.

Where can I get an instant loan?

You can get instant loans from a number of different places:

• Online lenders: Some companies offer instant loans through their websites. You fill out a form online, and they tell you quickly whether you’ve been accepted.
• Mobile apps: Many lenders have apps you can download to your phone. The app walks you through the steps to apply for a loan.
• Banks: Some banks now offer faster loans to their customers, especially if you already have an account with them.
• High street lenders: Some shops on the high street offer quick loans. You can go in and talk to someone face to face.

Always make sure the lender is approved by the Financial Conduct Authority (FCA). This means they follow rules to treat you fairly. You can check if a lender is approved on the FCA website.

How to get an instant loan

Getting an instant loan is simple if you follow these steps:

1. Compare different lenders: Look at several lenders to find the best deal. Check the interest rate (APR), how long you have to pay back the loan, and any extra fees.
2. Check if you can apply: Most lenders want you to be at least 18 years old, live in the UK, have a bank account, and have some regular income.
3. Gather your information: Have your ID, bank details, and proof of income ready. This might be payslips or bank statements.
4. Fill out the application: Complete the form on the lender's website or app and ensure all details are accurate.
5. Wait for a decision: The lender will check your information and tell you if you can have the loan. This often takes just minutes.
6. Review the loan agreement: If you're approved, read all the details carefully before you agree. Make sure you understand how much you'll pay back in total.
7. Receive your money: After you accept the loan, the money will be sent to your bank account.

How to get an instant loan with bad credit

If you have bad credit, getting an instant loan can be harder, but it's not impossible. Here's what you can do:

• Check your credit report first: Make sure there are no mistakes on your credit report. You can get a free copy from the three main credit reference agencies – Equifax, Experian and TransUnion.
• Only apply for loans you're likely to get: Each loan application can affect your credit score. Use eligibility checkers that don't leave a mark on your credit report to see if you're likely to be accepted before you apply.
• Show you can repay: If you have a regular income, even if it's small, make sure the lender knows about it.
• Look for lenders who help people with bad credit: Some companies focus on lending to people who have had money problems in the past.
• Consider a guarantor loan: This is when someone you trust agrees to pay back the loan if you can't. Having a guarantor with good credit can help you get approved.
• Try a credit union: They often look at more than just your credit score when deciding if they can lend to you.

Remember that loans for people with bad credit often have higher interest rates. This means you'll pay back more money in the end.

Should I get an instant loan?

Before you get an instant loan, ask yourself these important questions:

• Do I really need this money right now? If it's not for something urgent, it might be better to save up instead.
• Can I pay it back on time? Think about your budget and make sure you can afford the repayments.
• Have I looked at other options? You might be able to get help from family, friends, or even government benefits if you're struggling.
• Do I understand all the costs? Make sure you know the total amount you'll pay back, including interest and any fees.
• Am I using loans too often? If you keep needing loans to get by, you might need help with managing your money.

Instant loans can be helpful in emergencies, but they are not a good solution for long-term money problems.

If you're worried about your debts, you can get free advice from places like Citizens Advice, StepChange, or MoneyHelper.

Remember: Only borrow what you need, and make sure you can pay it back. If you're not sure, it's usually best to look for other ways to solve your money problem first.

 

Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.