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Instant Payday Loan Options in the US

Payday loans lending companies promise to provide funds instantly after request. To be honest, they are not instant, but almost instantaneous.
thadues
Author: thadues
Last Updated: February 4, 2020

After reading the title, you probably think instant payday loans are disbursed immediately. Well, sorry to burst your bubble but they are not exactly ‘instant.’ Lenders can’t transfer money directly because they need to review the application, loan affordability and check if you meet their base criteria before they approve the loan. Moreover, some payment methods do not reflect money instantly.

With that said, what instant payday loans offer is a quick loan approval process with the same day approval (more on this later on). But why would you need an instant loan? Well, unexpected things happen even to the most organized and futuristic people in the world. One moment your budget is intact, and the next, an emergency falls on your lap. These loans are designed to get you out of tricky situations.

Many lenders today offer such loans. With the spike of lenders in the industry, borrowers are confused about which company is the best. To help you make an informed decision, we have compiled a short guide detailing everything you need to know about instant loans. From the base qualifications, costs to the documents needed for approval of the loan.

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    Apply for a Payday Loan Now! | Best Payday Lender 2020

    Our Rating

    Viva payday loan app company logo
    • Loans From $100 to $15,000
    • Instant Application & Approval
    • Bad Credit Considered
    • Lenders From All 50 US States Onboard
    Viva payday loan app company logo
    Note: Instant loans don’t actually exist. However, online lenders in the US try their level best to approve and disburse loan amounts on the same day. So in this article, we shall still refer to them as ‘instant’ loans.

    Is it possible to get your payday loan instantly?

    As pointed out, it’s impossible for a variety of reasons. The fastest mean of getting an emergency loan involves applying through a physical store. If you submit your application online, there are chances you might receive the loan on the following business day. It might take even longer depending on the bank your bank.

    Bear in mind that state laws outline the loan amount you can borrow while the lender sets qualifications you need to meet before they can consider you for the loan.

    How do Instant Loans Work?

    Instant loans work like normal payday loans.  The process starts with a borrower submitting an application either through the lender’s site, application, and physical store or through the telephone.

    The loan application form requires you to provide some information that they will use to determine if you are good for the loan or not. Remember, instant loans are payday loans, which means they are ideal for individuals with poor credit scores. Because of the risk involved, traditional lenders such as banks don’t touch borrowers with poor credit. Instant loan lenders accept such borrowers because they don’t even check credit scores with third party financial bureaus in the US.

    If the lender determines you qualify for the loan amount, they proceed to send you a loan contract which details the terms and conditions of the loan along with the timelines and due dates for every repayment. These details are important since lenders use them to enforce lateness fees and in some instances early repayment fees. After signing the contract, money is sent into the bank account you detailed on the form.

    If the application is rejected, they will send you a letter detailing the same. If you qualify for a loan but not the amount you applied for, the lender will get in touch and advise you on the same. If you agree, they will disburse a lower loan amount.

    Repayment

    What happens next after securing an instant loan? Easy, you use the loan as you prepare to make your first payment with your next paycheck. In case you are wondering, emergency loans don’t have grace periods.

    There are several methods you can repay the loan. If you applied online, chances are you allowed the lender to withdraw cash from your bank to repay the loan when the deadline hits. Before the company withdraws money, they will send you a couple of reminders for the same. The danger of using this method is that even when you don’t have money, some lenders still repay the loan and result in an overdraft which costs you money.

    If you apply at a physical store, you will leave the lender with a check for the loan plus interest and fees. The lender will cash in the check on the due date.

    How much do you repay?

    The amount you repay every month depends on the loan amount, interest rate, and the time given to complete the loan. This information will be provided before you apply (for the case of online applications).

    Some lenders charge a processing fee in addition to the interest rate, which is capped at 0.8% per day in all states. But even then, some states have higher APRs than others.

    How much does an instant loan cost?

    Speaking of APRs, it’s important to understand how much an instant loan costs. By now, you already know it is more expensive than traditional loans. But do you know just how expensive an instant loan is?

    Before we get into that, the high rates are because the loans are disbursed fast and second, they run a high risk extending a loan to a borrower with poor credit. A same-day loan APR can go as high as 400% on a loan amount varying between $100 and $10000.

    But even with the high rates, you can still find a cheaper instant loan if you do your research well. For instance, some lenders offer rates of 5.99%.

    How do you qualify for an instant loan?

    Before the lender sends the loan amount or approves your application, they perform some screening and confirm you check all the boxes of their requirements. The requirements vary slightly depending on the loan. But generally, they include

    • You should be between 18 and 21 years (actual age depends on the resident state)
    • You should be a US citizen
    • You should have a savings account (active)
    • You should have monthly income (usually of not less than $600)
    • You should live in a state that permits instant loans
    Note: these requirements help prevent the company from being bombarded with applications that don’t meet the mark.

    Difference between an online lender and an in-store lender

    We’ve stated above that you can apply for a loan at a physical store or through an app or an official lender website. Which one should you prefer? Below are some ways the two types of lenders (application methods vary).

    In-store vs. online support

    When you visit a lender’s location, you have the chance to interact with the support staff, ask questions and receive clarification on terms and conditions. This is usually helpful especially if it’s your first time applying for the loan or you have no understanding of how the loans work.

    On the other hand, an online lender offers a fast and convenient method of application. You can start on the process while you are at the store, at home, or a hospital. If you don’t understand some bits of the loan process, you can get in touch with customer support.

    Online direct brokers vs. lending brokers

    When applying for an emergency loan online, you should determine if the lender in question is a broker or a direct lender. With a direct lender, you will apply and receive the loan amount directly from the company. You also have the chance to speak to support staff if you have questions.

    On the flip side, with online brokers, you apply to the company, which in turn uses the information you provide to shop for the best lender willing to give you a loan. Though you will never deal with the broker after loan approval, they are good because they match you with lenders you might not have reached otherwise.

    Licensed lenders

    When completing an online application form, ensure that it is licensed to conduct business in your state of residence. Bear in mind that the governing laws are different in every state. For instance, in Georgia, same day loans are prohibited.

    Types of Instant loans

    Generally, there are two main types of instant loans. These include;

    • Title loans – these are loans you borrow using your car’s title as collateral. These types of loans are usually due in 30 days. However, if the loan amount is big, some lenders give the option of installments for several months.
    • Payday loans – these are unsecured loans that are paid within 30 days or three months. Lenders set repayment dates close to your payment dates.
    Note: title loans are secured loans and attract higher loan amounts.

    How do I Apply for the Instant Loan?

    The process involves filling an application form. The form takes a few minutes to complete. In addition to the information on the form, lenders require you provide the following documentation;

    • Proof of income
    • ID
    • Bank account number

    Pros and cons of instant payday loans

    Pros:

    • Saves time – the application process takes a couple of minutes to complete. Upon approval, money is in your account in a couple of hours.
    • Easy approval – online short-term lenders prefer a minimum credit score of 600. Luckily, some have instant bad credit loans as well.
    • Ability to compare – with online sites, you have the chance to compare hat every lender has to offer. This makes it easier to get the best rates.

    Cons:

    • High cost – online instant loans are expensive, which is why you should always compare rates before signing a loan contract.
    • No prepayment savings – if you repay your loan before time, some lenders don’t provide prepayment savings. Even if you repay the loan before the due date, you will still owe the company the same fees and interest.
    • It is a short-term solution – most lenders require that you repay the loan with your next paycheck. It is, therefore not a long-term solution – it is easy to get in a debt cycle.

    Verdict

    Instant payday loans come in handy for when you are in a rush for money. As you fill out the application form, have a clear use for the money and know-how you will repay it. If you do not have money to make full payment steer clear of the loans.

    If you can repay the loan, it’s a great resource for tight financial situations.

    Apply for a Payday Loan Now! | Best Payday Lender 2020

    Our Rating

    Viva payday loan app company logo
    • Loans From $100 to $15,000
    • Instant Application & Approval
    • Bad Credit Considered
    • Lenders From All 50 US States Onboard
    Viva payday loan app company logo

    FAQ

    What if I cannot afford to repay my loan on the due date?

    The thing about payday loans is that they are fast, but on the other hand, they are expensive and do not have a repayment grace period. Regardless of whether you have an installment loan or a short term loan due in 30 days, you still need to make a payment on your next payday. If for whatever reason, you cannot repay on the agreed due date, most companies understand and provide an extension. However, they require that you repay the accrued interest for the month. Strive never to miss a payment. If you skip one, catching up becomes a real struggle and chances of slipping back into a financial pit are high.

    How do instant loan lenders determine the information provided is correct?

    Easy. They call you immediately they receive the application to confirm the details. In other instances, the lender will call the company you detailed as your employer to cross-check the information offered. Do not worry; they tend to be subtle about it and do not disclose your intention to take the loan to your employer.

    Will the instant loan affect my credit score?

    Yes, it can affect your credit score. If you are prompt in paying the installments and the loan in full, the lender will send the information to the top three credit bureaus in the US. Over time, your credit score will improve and you can get qualify for a traditional loan. On the flip side, if you are not faithful in repaying the loan, the company will update the information with the same credit bureau causing your credit score to worsen. But before it gets to this, the lender gives you a payment notice and some time to catch up with the loan repayments. If you prove stubborn, they will have no choice but to send your details. This is all part of responsible lending and they are well within the law to act in this manner.

    US Payday Loans A-Z Directory

    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
    thadues

    Thadeus Geodfrey has been a contract writer for Lernbonds since 2019. As a fulltime investment writer, Thadeus oversees much of the personal-finance and investment-planning content published daily on this site. With a background as an iGaming expert and independent financial consultant, Thadeus’s articles are based on years of experience from all angles of the financial world.

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