It can happen that you suddenly need a quick loan. Overdrafts, however, are not the best solution if you want to take a relatively small loan for an urgent issue, such as car or refrigerator give up the ghost. For example, instant loans are available from online banks, but also in other ways. However, all providers have in common that the interest on fast money is higher than on a normal loan, even more so if you need an instant loan without a credit check. The advantage of the instant loan: the desired amount can be available within a few hours.
- the fastest loan option
- usually used for small loans from 1,000 euros
- often offered by direct banks.
- normal, albeit swiftly processed application including credit check
1. What are instant loans?
Even the name promises fast money – and indeed the processing period for instant loans is extremely short. In some cases, the required amount is already available after 48 hours. Especially online banks offer their customers instant loans and advertise with an instant pledge.
Large amounts are not approved for instant loans. As a rule, these are small loans for sums starting at 1,000 euros, whereby the duration can be up to 36 months. Contrary to what the advertising-effective name suggests, lending takes place even with instant loans only after a request, just like with regular loans. This also applies to the rules for repayment and the interest due. And just as in the case of regular loans, most providers do not issue instant loans without prior credit checks – through a Private credit statement.
The key difference is that the application can be made online and usually answered promptly, with a commitment or rejection. But even after an immediate positive decision is not always paid equal. Only if an immediate payment is guaranteed, the desired amount within 8 – 72 hours on the account.
2. Considerations before the online application
Before the loan application is made, the customer should ask whether the sum is actually needed immediately or can not be saved over a foreseeable period, without getting into debt.
Moreover, a realistic assessment of one’s own financial situation is helpful, because one wants and must pay back the amount within the agreed period and repay the loan. Anyone who thinks that they may be able to settle the remaining sum at one go at a later time should be careful to consider options for immediate repayment and thus also savings in interest on their instant loan. The shortest possible repayment term makes the instant loan cheaper overall, but imposes higher monthly burdens on the budget – the motto here is “as short as possible, as long as necessary”.
Last but not least, deferred deduction of the installments leads to a negative classification in the Private credit and thus to considerable obstacles for later loans.
Also, the seriousness of the provider should be checked – here you can not get around a look in the fine print in the loan agreement. Evaluation portals that provide an overview of the evaluation of the instant loan offer by other customers and their experiences are also helpful.
3. Who offers instant loans?
The digital transformation is also turning the financial industry around. Consumers who are accustomed to doing business through online banking and digital payment providers are looking for a quick, effective way to handle their loans. Online banks are all geared up for fast settlement. As a result, the portfolio of direct banks generally also includes instant loans. Since many online banks offer a 24/7 service, they also have the opportunity to quickly process and respond to customer inquiries.
Anyone who turns to his house bank, however, has to reckon with the usual working hours. Even if the own customer advisor would be inclined to process the application quickly, the preparation and signing of the documents usually takes longer than with a direct bank, the credit check also takes time, and until the amount can actually be paid a few days pass. By contrast, the online banks have a routine in the processing of instant loan inquiries.
3.1 Providers of instant loans
- direct Banking
- credit Providers
- Personal loans portals
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4. How the loan application for instant loan expires
Even those who need money at short notice should first consider whether some of the amount can be covered by savings. If then the desired sum is fixed, one should use a loan calculator. Numerous portals also offer comparison computers for instant credit comparison. The comparison helps to identify the provider with the most favorable terms. In this way, lending rates can save money in the long term.
4.1 instant loan comparison
For most credit comparison calculators, handling is very simple:
- Enter the desired net amount
- Enter credit term
- If necessary, add the purpose
- Start calculation
After entering this information, the online loan calculator generates a list of eligible instant loan installment credit providers, most of which are sorted by the minimum APR or the minimum monthly rate. The results should include, in addition to the name of the lender, the amount of the monthly installment as well as the borrowing rate and the annual percentage rate of charge. More information on eradication should also be readily available. If possible, a representative example of an instant loan and the 2/3 interest rate indicated should be studied for all eligible providers. This is recommended because instant loans are often given at credit-based interest rates, not the minimum APR. The 2/3 interest rate provides information about the expected interest rate.
5. Make a loan application
Anyone who has selected a suitable company from the list of listed lenders can – often with just a click of the mouse on the provider – make a non-binding and free credit inquiry. It is necessary to provide personal details, as well as proof of (regular) income or other evidence of the financial situation of the applicant. Completing and submitting the form takes only a few minutes. The lending bank usually responds promptly with a personal loan offer. The bank can certainly make a Private credit request, but the Private credit score of the interested party remains unaffected by this request!
Good to know: in such a request, it is not a bad idea to specify a second borrower, because in this way you get better terms with some providers.
Once all required information has been provided, the borrower already receives a confirmation or cancellation from the bank. In the event of a commitment, the documents requested by the bank must then be submitted.
5.1 Legitimization and proof of income
If you have now received the promise for an instant loan, the bank first demands legitimacy. As with opening an account, direct banks require verification by PostIdent or the VideoIdent procedure. In the case of PostIdent, the applicant legitimizes himself in a branch of the German Post Office by presenting a valid identification document, but this is clearly more time-consuming than the legitimization via a video call. It can be done faster via VideoIdent – the video chat can be done on the home computer or via the smartphone. An employee of the commissioned company checks the identity card or passport and carries out the reconciliation with the applicant. This requires a high-resolution camera and a stable Internet connection to complete the VideoIdent process. If the comfortable, fast process is completed, you will receive a TAN for confirmation.
In addition to legitimacy, the lender requires proof of income, such as a digital bank statement or a certificate from the employer. As a rule, the required documents can be uploaded. The documents required here depend on the provider, but often also on the profession of the borrower. Also, the contract for the instant loan can be transmitted digitally at online banks. Only in this way can the promise of immediate payment actually be implemented. The postal service is usually possible, but this takes a few days!
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5.2 The payment of the instant loan
If the borrower has passed the credit check and submitted all necessary documents, the payment of the loan amount can in many cases really be very fast. “Immediate” means here within a period of 48 to 72 hours. Already during the application process it is usually pointed out when the payment after the online instant confirmation actually takes place.
6. Instant money, short-term or personal loans
In addition to the real instant loans, some banks or credit intermediaries make further offers for smaller amounts, which are offered under terms such as “immediate money” or “emergency money”. Although the required money can be credited to the applicant’s account on the same day, the resulting fees, calculated as an effective interest rate, make this option very costly.
Also, the loans called “short-term loans”, which can be taken up for 30 days, are also expensive, taking into account the costs charged by the providers – although in this way amounts of up to 600 euros can sometimes be paid within Get 20 minutes.
If you do not have the credit rating to handle your loan application through a reputable bank, you can also claim a personal loan. On-line portals convey after own classification of the creditworthiness of the prospect loan from private individuals, which are however subject to no regulation.
7. Instant loans even without Private credit
They actually exist, the immediate loans even without Private credit information. However, most professionals advise against Private credit-free loans. Since the bank refrains from obtaining meaningful information about the payment behavior of the borrower, it assumes a high risk of lending. This risk means comparatively high interest rates on the loan.
Credit intermediaries who advertise for instant loans without Private credit online do not usually cooperate with German banks that are regulated by the BaFin and therefore reputable, but with foreign financial service providers. If irregularities occur, the jurisdiction is often outside the jurisdiction of the German courts – and the relatively small loan incurs disproportionate difficulties.
Therefore, those who have a negative Private credit score should better practice self-criticism. The negative entry usually comes about if you have not met a payment obligation. Here it is advisable to clean up and possibly also to optimize the handling of your own finances, before another loan is taken.
8. Instant loans without employment
As already described, instant loan providers ask questions about the financial situation and income during the application process. Anyone who has no employment, therefore gets a negative decision. Trainees, students or unemployed people can not claim installment credits – in exceptional cases exceptions are made, for example, when students teach parents as guarantors, but only for small amounts.
9. Buy money with the life insurance policy
Those who need money quickly and have life insurance can also take advantage of this. The owner has two options here: if he sells the policy, he receives the surrender value set by the insurance company and on top of that a sum for forecast surpluses.
The life insurance loan is uncomplicated and can often be processed more quickly than an application for an instant loan. The costs due include the processing fee of the insurer, which amounts to a maximum of 1% of the loan amount. Interest rates vary from provider to provider and are consistently higher than conventional lending rates.
10. Conclusion on instant loans
The described offers for fast loans, which are referred to as “instant loans”, score points through an uncomplicated, rapid processing – usually online. The providers are usually reputable, regulated direct banks, at least if their own creditworthiness is good enough. Credit intermediaries who refrain from providing Private credit information, on the other hand, use foreign credit institutions whose seriousness the customer can not assess.
To make sure that you choose the cheapest provider, it is recommended to use a salary comparison. Online available credit calculator list after entering the desired sum and term the cheapest provider with indication of the monthly rate and interest. After a thorough examination, the customer can reach the provider of his choice with one click, check the conditions and make a non-binding, Private credit-neutral inquiry, which will be answered quickly. If all necessary documents are at hand, the loan application will actually be processed within a short time. Fast availability brings high costs, but can help manage an unforeseen issue when absolutely necessary.
It goes without saying that consumers should realistically calculate actual demand and repayments before applying for a loan.