Technology, however, has made it possible for you to apply for a loan, right from the comfort of your own home. While this type of loan may not be right for everyone, many people are finding happiness and less anxiety in instant approval loans.
Remember, Safety First
Since you are applying for a loan online, you will be providing personal information. Be careful. While there are plenty of reliable lenders online, there are scams and identity thieves tucked away. They often know how to look enough like a reputable company to fool you, unless you take the time to look a little harder. Even if you are excited about a great deal or rate, remember to investigate a little further. This can save you from becoming a victim of identity theft.Investigating scams is not as hard as it seems. First, follow the general rule that, if it sounds too good to be true, it probably is. Next, be wary of any lender that requests any kind of upfront deposits or advances. Because many conventional lenders ask for upfront deposits or advances, people rarely think anything of it when an online lender requests the same. Scam artists have used this to their advantage. Before sending any money, find out why you will need the deposit. Ask the business their trade name and search for them on the Better Business Bureau.
Avoid any lenders that request any kind of pre-payment or application fees. Conventional lenders will not ever ask you to make a pre-payment. Any application fees should also be rolled into the actual loan. Additionally, avoid any lender that requests cash for collateral. Lenders that require collateral will request personal property for collateral, like your home or your car.
Avoid Applying Too Often
One of the most common mistakes borrowers make is applying for too many loans at once. What they don’t realize is that, with each inquiry on their credit report, their credit score drops. This, of course, makes it more difficult to actually get approved for a loan. Generally, any more than three credit inquiries on your credit report in a twelve month time span will affect your credit negatively. Try to limit your loan applications to only one or two a year. This, of course, can be hard if you are denied for two loans in a row and you need funds. If this happens, try to seek out other sources for the funds you need until you can get your credit score where it needs to be so that you can avoid any further damage to your credit report.Payday Loans
Another type of lender you should watch out for is the payday lender. This is especially true if you happen to have good credit. Payday loans generally have extremely high interest rates for very little money. This is because this type of loan is designed to target individuals with very bad credit.Payday loans do not generally base their decision on your credit. By not checking your credit, they are assuming a higher risk. This is why they charge such high interest rates. They are also likely to request your bank information. This is how they receive payment, in the event that you fail to make your payment on time. You can usually spot these lenders pretty easily. While completely legitimate, they are probably not the type of instant approval loan you are looking for.
Advantages of Instant Approval Loans
Obviously, the biggest advantage of an instant approval loan is that you know whether or not you are approved for your loan within just moments. You can apply for the loan, at your leisure, at any time of day, right from the comfort of your own home. This is extremely valuable to some individuals.Another advantage is that you have an almost limitless number of options when it comes to lenders. You can shop around almost anywhere in the country. You are not confined to the rates, terms, and conditions of your local lenders. Instead, you can search for the lender that best fits your needs.
Disadvantages of Instant Approval Loans
Besides the potential of scams, there are other disadvantages of instant approval loans. Some of them, however, can be prevented. One of the easiest disadvantages to prevent is agreeing to terms that might not be in your best interest. Before committing to any terms, carefully review the terms outlined in the company’s website.You are also likely to find that instant approval loans do not always have the best rates. You may find that, by waiting a few days, you could save substantially on the amount of interest you are being charged. This can sometimes account for thousands of dollars, depending on the interest rate and repayment schedule.
