Although there are two types of loans: unsecured and secured, the former has been divided into various categories and one of them is instant loans in Ireland. As the name suggests, these loans refer to a sum of money that can get instantly.
Various small loans have been designed to help people tide over during unforeseen expenses and this is why the approval does not take a longer time. Many online lenders advertise small loans with instant disbursal.
Some state that “approval within two minutes”. When a lender has to go through the entire application and check the credit score, it can be hard to stomach that the loan can be signed off on within a couple of minutes. How much of it is true?
The devil is in the detail
Almost all small loans are same in nature. They all are a sort of payday loans. Even though online lenders are advertising them as instant loans, they have some similarities like payday loans. For instance, lenders will offer money for a period of 14 days – not more than a month in some cases.
You will have to pay off the debt at the end of the term in a lump sum. However, there are a few lenders that do not treat instant loans as payday loans. Although you will not be able to borrow a large amount of money, you do not have to pay off the debt in a lump sum.
The repayment length of the loan will not be more than a month and you will pay it down in four weekly instalments. This eases off the burden of a lump sum payment. Most of the lenders do not offer a fixed weekly instalment system because it increases their chances of making profits.
Although it may seem easier to pay off the debt all at once, you struggle to make the repayment because of a lack of sufficient funds. As a result, you ask for the rollover of the loan that means you extend the repayment term for another 15-day period.
Because of interest and late payment fees, the cost of the loan quickly adds up. if you need a small loan, it is always recommended to do some research so you do not fall into a debt trap. You should choose a lender that offers these loans at fixed weekly instalments.
However, it does not mean that you do not need to check your affordability. A rule of thumb says that you should look over your budget to see if you will have enough money to pay off the debt at the end of the month after meeting all of your expenses.
Use online loan calculators to see the total cost of the debt. However, do not forget that this is just the estimation. The real cost of the debt will likely be higher than the estimation.
Does “instant approval” exit?
When it comes to instant approval, it does not mean that you will get the loan within two minutes after filing the loan application form. Even if you want to borrow just €100, lenders will look at your affordability and your credit score.
Of course, it takes some time to make the decision. Instant approval does not indicate that you will get the money right after you put in the application. It means you will get the instant approval after the completion of the entire process. Of course, you cannot get approval if your documents are incomplete or you have not filled in the whole or accurately the application form.
Once the entire process is done, you can get the money directly into your account. It will naturally take a couple of minutes. Here the message to spread with the instant approval is the same day disbursal.
Instant loans can be payday loans
Some lenders may be offering payday loans like instant loans. When they say that you can get the approval within a couple of minutes, it means as soon as you put in the application form.
As you know that payday loans are the most notorious loans and this is because the lender lends you money without checking your credit score and affordability.
Since they do not have to get into the formality of checking your credit report, you can get the money immediately after filling in the application form. Make sure that the lender you are applying to is not offering payday loans in disguise of instant loans in Ireland.
It is always recommended to do research. Ask your friends or neighbours if they know a lender that offers instant loans.
How can you get an instant loan at affordable interest rate?
Regardless of the type of the loan, it is crucial to have a good credit score to get money at lower interest rates.
Although lenders will also take a look at your income statement to check your affordability, you should use online loan calculators to get an estimate of the total cost of the loan and compare it with your budget.
Borrow money only when you are sure that you will be able to pay back the loan on time. When there is no financial emergency or you can put off the purchase, you should never borrow money.
Instant loans in Ireland do exist. However, it does not mean that you will get the loan just after you put in the application form. It means you will get the loan within a couple of minutes once the entire application is completed.