When emergencies catch you off guard, you more often than not need an instant injection of cash. Here comes the role of instant loans. Banks do not provide these loans, but direct lenders do. These emergency loans are aimed at subprime borrowers. Since they are used to meet small emergency expenses, they do not require complex paperwork, and hence, the loan is quickly processed. Once the process is over, funds will be in your account in a matter of seconds. Normally, the loan application is processed the same day you apply for it.
There are various types of emergency loans with instant cash that you can get approved without further ado from direct lenders in the UK, but they all have a few common features, such as:
If you have come across an emergency, you would want to get a loan approved instantly. This blog discusses some types of instantly-approved loans. They are also called emergency loans.
Quick loans are instant loans. The most intriguing feature of these loans is the same-day approval. Since these loans are aimed at unexpected expenses, the maximum loan amount you can borrow is up to £1,000. However, it does not mean that your lender will easily let you get approval for this much money because the lending amount is determined by two factors:
If you apply for quick loans with an extremely poor credit history, you will be charged high interest rates. A careful assessment is vital to avoid falling behind on repayments.
Payday loans are also small emergency loans. Like quick loans, they are also approved the same day you put in the loan application, and hence are called instant cash loans. However, they involve fewer formalities. Payday loans do not include a hard credit check, meaning you do not have to lose your credit points, as hard inquiries do not show up on your credit report.
Lenders will take your repayment potential under advisement. As long as you demonstrate your repayment capacity, you can easily get these loans approved. Bear in mind that the repayment term of payday loans is only about 14 days, while the repayment term of quick loans is about a month.
When an application for a payday loan is submitted, lenders run a soft check, which is known for leaving no footprints on your credit file, but at the same time, they do not give much insight into your credit score. This is why they charge high interest rates. They could be higher than quick loans.
Payday loan lenders usually avoid lending more than £500. At the time of applying for these loans, make sure you provide accurate details of your income and expenses.
A doorstep loan is the same as a payday loan. When payday loans are offered on your doorstep, they are called doorstep loans. Having submitting your application, you will receive a call from your lender to schedule a meeting with one of their representatives. They would call on your home to discuss your credit needs. Your income, in addition to your credit score, plays a role in approbation. Here are some key facts about doorstep loans that you must know:
All emergency loans, whether they are doorstep or payday, do not help build your credit rating. Even if you are required to settle your debt in weekly or bi-weekly instalments, you will not see any improvement in your credit score despite on-time settlement of the debt.
Instalment loans are different from the aforementioned loans. They come with a larger amount of money and are aimed at funding planned expenses, too. These loans come with instalment repayment plans. The minimum repayment length of these loans is about six months, and therefore they are called 6 month loans.
To wrap up
All aforementioned loans can be obtained instantly from direct lenders in the UK, but they are quite expensive. Whether you take out payday loans or 12 month loans, make sure that you will not struggle to keep up with payments.
Never borrow more than you need, even though you can afford to repay. Choose the right loan because each loan has a different purpose. For instance, instalment loans can help build a credit rating, but small emergency loans cannot. Consider a loan advisor if you need some advice.
Jennifer Powell embraced finance writing just the moment she started working as a finance executive with EasyCheapLoan, which is a direct lender in the industry. Jennifer has an exceptionally keen eye for details and used her skills to pen down numerous blogs and articles on finance. When asked, she simply replies with a look on her face that shows how genuinely she cares for people struggling with financial problems. Jennifer works dedicatedly as a finance professional and considers sharing both her experiences and knowledge to increase the financial literacy of people and businesses.
