Instant Approval Bad Credit Loan

It is very easy to find an instant approval loan when you have bad credit.  An instant approval loan is just what it sounds like, a loan that a lender approves almost instantly.

Many internet loans are instant approval because the lenders can instantly look at your qualification if you submit your loan application online.  A lot of storefront lenders in the cities also have instant approval bad credit loans available. These store front loans are instant approval because the employee who makes them sends the information into a central location for approval via computer.

How Instant Approval Loans Work

Lenders are willing to give instant approval loans to people with bad credit if those individuals can prove they have a reliable source of regular income. This source of income can be a job, a business with regular cash flow, a pension or a government benefit check. The amount of the loan is usually limited by the amount of the steady income that a borrower can prove. Many instant lenders will demand proof of the income such as a paycheck or a bank statement.

Check Loans

A popular kind of instant approval loan is the check or bank account loan. This loan is made to a person who has a checking account. The person agrees to have the amount of the loan repayment available in their bank account on a specific day.  Sometimes this is done electronically, traditionally the borrower wrote a check that the lender cashed on that day.

Drawbacks to Instant Loans

The biggest drawback to instant loans is that the borrower is usually required to pay back the loan fairly quickly. The lenders are willing to make these loans to people with bad credit if they know the money will be repaid in the near future. Most instant loans require repayment within two weeks or a month. A standard practice is to require repayment on the borrower’s next pay day.

Many instant lenders will charge a fee often $20-$50 to renew the loan if the borrower can’t repay the loan.  Others will charge a very high interest rate on instant loans. Many lenders will charge people with bad credit higher interest because they are taking a bigger risk by lending to such people.

Use Instant Loans Sparingly

Generally, it’s a good idea to only take out instant loans in emergencies or other situations when no other source of income is available. The high interest rates and fees charged on these loans can easily eat up all of your income. Therefore it’s best to only take out instant loans if you have no other options available.