Instant personal loans have gained in popularity over the past five years, as those with no credit or bad credit are able to get the funds quickly and easily that they need to make ends meet.
This is a great option for those who are in a quick bind and need a quick fix, though it is not recommended by the experts that this service be used regularly. Because the interest rates are so high on these instant personal loans, a person can end up in worse debt after having taken one than they were beforehand.
Here are some basic facts and tips regarding personal, payday, and cash advance loans that you should know before proceeding.
As mentioned, the interest rates on instant personal loans is astronomical most of the time, with few companies offering rates below 25%, and more of them opting for the 28% to 30% range. This is the highest amount of interest allowed by federal law.
Once you have signed on for on of these loans, you will be asked to either write a postdated check or authorize and automatic bank transfer for the money that you borrowed along with the fees that the loan will cost you. If you borrow $100, for instance, you will be asked to repay $130 in two weeks’ time.
You will need to have three key pieces of information with you at the time of your application, these being your valid picture ID, a valid checkbook, and at least three months’ worth of paycheck stubs or income statements.
All of the vital information on these three proofs needs to match up perfectly in most cases, and no starter checks will be accepted.
Because your checking account will be the only real way that the lender has of collecting your loan funds, they will want to be sure that all addresses and names are in place.
There are no credit checks or collateral involved with these instant personal loans, and this is why you are asked to pay such a high interest rate. The risks are high for these independent financers that you will default, and though you will be prosecuted to the full extent of the law for nonpayment, these proceedings can be rather costly, and the lender is charging you to cover this potential expense.
You might also be offered up to two extensions on your original loan if you ask in time, though you will pay the fees twice if you choose to do this.
If you are applying for an instant personal, payday, or cash advance loan online, remember that the checking account information that you give to the company through your secure application transaction is the one that they will use to pay your loan to you through, so be sure that you are not overdrawn and that everything is current before you decide on this route.
These types of loans are not usually something that folks do on a regular basis, but they can really help out in a bind.