Requirements for Instant Personal Loans

By Contributing Writer

  • Overview

    Requirements for Instant Personal Loans
    Requirements for instant personal loans are minimal. They're marketed to people who need cash quickly but also have limited options for borrowing cash. If you find yourself in this predicament, you may rightly wonder why a lender would take a risk on you. The answer is, there's something in it for the lender. Remember this as you gather the few documents you'll need to secure your loan
  • Warning

    Instant personal loans are ultra-high-interest, short-term loans. Before you accept the terms of such a loan, be aware that according to The Center for Responsible Lending, short-term lenders make 90 percent of their revenues from borrowers who are unable to repay their loans on time. And despite their advertised claims that they want you to borrow responsibly, they are aware that most borrowers will extend the term of their loan. Also be aware that short-term lenders charge as much as 400 percent annual interest on the loan. So as responsible as you may feel, the statistics are not in your favor.
  • Types

    Instant personal loans may also be called paycheck advances, payday loans or title loans. Sometimes you can receive cash the same day you apply for the loan, though more commonly you'll have to wait about 24 hours. Instant loan stores may be located in shopping centers next to supermarkets; and they may be designed to look and function like banks. But keep in mind that their lending practices are virtually indistinguishable from those of the local pawn shop.

  • Features

    Some instant personal lenders will require some collateral to secure the loan. Collateral is most often the title to a vehicle, and the loan in this case is called a title loan. A pawn shop will accept all kinds of goods including electronics, tools, musical instruments, sporting goods and jewelry as collateral against an instant personal loan.
  • Requirements

    Documents required for an instant personal loan will include pay stubs for up to 3 months prior, as proof of employment. You will always be asked for your employer contact information. You'll also need to meet minimum income requirements, which will vary from lender to lender; $1,000 per month is a round figure. Bank statements may be required, though some instant lenders do not require a checking account. You will need valid identification.
  • Considerations

    Repayment options vary between lenders. Some will accept only a lump-sum payment on the due date of the loan. The lump sum may be withdrawn directly from your bank account, or you may pay at the loan office. Other lenders will accept installment payments, but these must be specified in the loan terms at the time of the loan. You do not have the option of negotiating installment payments later when you are unable to repay the full amount.
  • Time Frame

    The usual period for an instant personal loan is 7 days. Failing to repay constitutes your tacit agreement to pay fines as well as the interest on an extended loan period. Failing to repay the loan will ultimately result in the lender seizing the asset you offered as collateral.

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