An instant cash loan is a type of short-term funding designed to grant borrowers instant access to cash, usually while in-between paychecks. One of the most common types of quick cash loans are payday loans. According to the U.S. Chamber of Commerce, about 12 millions Americans use payday loans every year.1
In this post, we’ll give you some information about quick cash loans, some types of instant installment loans available to you right now, and how you can pick the one that works best for your bank account and financial goals.
What You Need To Know About an Instant Cash Loan
Here are some essential facts to consider when looking at an instant loan to get cash:
There Is Still an Application Process
Even though the process is less complicated and faster than applying for a bank loan, instant loans still require a loan application. In your loan request you’ll still need to provide your basic information and verify your employment and income.
An Instant Loan Doesn’t Always Mean “Instant”
It could take a day or two to get a decision back on an instant loan. While this is still much faster than a traditional loan disbursement, applicants should prepare for a slight wait.
The Loans Are Usually Small
The average loan amount for an instant loan hovers between $300 and $500, with most people using these cash advances for unexpected emergencies or cash shortfalls.
Instant Loans Are Short-Term
“Short term” sounds like an excellent adjective for a piece of debt, but in fact, this loan can be one of the more challenging to repay. Short-term loans require the borrower to quickly pay back the loan, which can be challenging for someone already looking for debt assistance.
Interest Rates Are Very High
Instant cash advance loans and payday advances can be subject to very high interest rates and unfavorable terms which is why it is important to do your due diligence when looking at these types of loans. Lenders charge high rates as an added layer of security for lending to borrowers with low credit scores.
Bad Credit Is Not a Problem
Although you can get an instant loan with a not-so-great credit score, they can be easy financial traps to fall into that can worsen your credit if you can’t repay the loan by the end of the term.
Who Offers Instant Cash Advance Loans?
|Payday Lenders||Lenders of payday loans offer short-term loans that are typically due on your next payday.||Payday loans offer fast access to cash, easy application process, and usually don’t require good credit.||Payday loans usually come with very high interest rates, a short repayment period, and can lead to a cycle of debt.|
|Online Lenders||These direct lenders operate entirely online and offer a variety of loan types, including short-term loans and installment loans.||Convenient application process, quick decision, funds can be available quickly.||Interest rates can be high, especially for those with poor credit.|
|Banks||Some traditional banks offer short-term personal loans and lines of credit.||Lower interest rates than payday loans and online lenders, longer repayment period.||Typically require good credit, application process can be longer.|
|Credit Unions||Like banks, some credit unions offer short-term loans and lines of credit.||Lower interest rates than payday loans and online lenders, longer repayment period, more likely to work with borrowers with poor credit.||Membership is required, which can involve fees and other requirements.|
Types of Quick Cash Loans
A payday loan is a short-term loan that is available to help you with your short-term cash needs.
Payday loans are among the most popular forms of quick cash loans. Not only are payday loans quick, but they are also very accessible to people with low or bad credit scores—a factor that makes applying for a regular loan a nonstarter for many people. But there are many dangers of payday loans, so make sure to do your homework before signing for one.
To get a payday loan, a borrower writes a check to a lender for the amount of money they want to borrow, plus the lender’s interest rate and applicable processing fees. The lender then gives the borrower the loan amount and holds the check for 14 days, when the borrower’s next payday hits. On or after that payday, the lender cashes the check, recoups the loan amount, and profits from the interest and fees. Thanks to the internet, this “check writing” and “check-cashing” are through digital transfers like direct deposit and automatic withdrawals.
Dangers of Payday Loans
Essentially, payday loans work best when the borrower can pay back the lender in full within the terms of the loan agreement. This is usually within two weeks, and the payment will include high interest and additional fees. These conditions are what make payday loans among the most expensive loans that a person can borrow.
However, when a payday loan isn’t repaid by the end of the loan agreement, lenders roll over those accounts into new contracts. It may be easy to think of this rollover as a simple extension of the life of the payday loan, with some added fees and possible penalties added on. But in fact, you are entering into a new loan agreement with its interest rate and fees that have nothing to do with the fines for not paying your original loan back on time. These compounding fees are a reality for many people who get into payday loan trouble; combined, they owe lenders billions of dollars on loans that average less than $600 per person.
Payday loans can be helpful, but they can be financially dangerous if you can’t pay them back. The fine print on payday loan agreements can seem complicated, but you must review it so you know what kind of commitment you’re getting into.
Peer-to-Peer (P2P) Loan
A payday advance loan is not the only option for borrowing money without the help of a bank or credit union. In a relatively new lending structure, peer-to-peer (P2P) lending connects investors looking to fund loans for people who need money.
Peer-to-peer (P2P) lending avoids using traditional financial institutions. These loans are made possible by groups of investors connected directly to borrowers who may not find success securing a loan through conventional means. A typical loan request process would include supplying your financial information, credit history, and possibly some insight into why you need the loan. If you meet the lending company’s criteria, you will be approved, and investors will fund the loan.
Because investors instead of banks determine them, P2P loans are very flexible, with a range of loan terms that include reasonable repayment rates for borrowers. And while your credit score will ultimately help determine that rate, P2P loan approvals don’t rely as heavily on credit scores as other types of loans do
While P2P loans can be issued for small businesses, they are still primarily used for personal loans and are sometimes offered for specific uses, like home improvement projects and medical expenses. Loans are approved by investors that see them as a reasonable risk; since their profit will be the interest you pay, they need to believe that you will make payments.
Overall, P2P loans can provide people without the best credit with an opportunity to get reasonable rates without the tight conditions that come with payday loans—which is why P2P lending is growing in popularity.
Auto Title Loans
Auto title loans are a type of secured loan that uses the borrower’s free-and-clear vehicle title as collateral. With a title loan, the borrower will give their vehicle title to their lender, who will then sign onto the title as a lienholder. This means that the lender has partial ownership over the vehicle during the terms of the title loan.
After the borrower pays back their balance in full, the lender can remove themselves from the vehicle title and return it to the original owner.
Similar to payday loans, auto title loans also usually come with very high rates and short repayment terms.
Cash Advance Online
Online cash advance loans are loans designed to help people get some extra cash in their bank account while they are in-between paychecks. These loans claim to give borrowers “early access” to their paycheck, but essentially they are just glorified payday loans.
Just like payday loans, full repayment for a cash advance loan is usually due by the time the borrower receives their next paycheck. Consumers may access this type of funding through cash advance apps, or online lenders. If you decide to use cash advance apps, be aware that there may be requirements like maintaining a minimum bank account balance, or having a credit score with a certain range.
Credit Card Cash Advances
Another way to access a cash advance loan is with a traditional credit card. Similar to getting cash back from a debit card, borrowers can also spend against their credit limit to get cash through their credit card. However, keep in mind that credit card cash advances often come with higher rates than standard credit purchases.
No Credit Check Loans
Borrowers may also consider no credit check loans if they are dealing with a less than perfect credit score. With no credit check loans, lenders usually forego the traditional hard credit check that usually happens during the loan approval process and instead pull a soft credit check. While a soft credit check may not necessarily go on the consumer’s credit report, it will still give the lender an idea of their general financial situation.
Pros and Cons of Instant Cash Advance Loans
Some advantages of instant cash advance loans include:
- Speed: Borrowers are often able to receive funding the same day, or even within a few hours!
- Easy: The entire process may take just minutes to complete.
- Bad Credit OK: Many of these direct lenders cater to borrowers who may not have the best credit.
There are also some severe disadvantages of instant cash advances loans that all consumers should know about. They include:
- High Rates: Interest rates for quick cash loans are known for being extremely high. These rates may cause the loan balance to increase from month to month if the borrower doesn’t stick to their original repayment schedule.
- Short Terms: Repayment schedules for these types of loans are typically very short, lasting just a few weeks or less. Unless you can completely pay off your balance by the time you receive your next paycheck, a quick cash loan may just cause you more trouble than it’s worth.
- Low Loan Amounts: Given the brief terms and high rates that commonly come with fast cash loans, loan amounts usually remain quite low. These low loan amounts may make it difficult to take care of major expenses.
Alternatives to Instant Cash Advance Loans
After looking at the options available for getting cash through instant loans, you may decide that they are a little riskier than you’re ready for. However, if you genuinely need cash in your bank account fast, then you’re going to have to do it “the old-fashioned way,” as someone’s grandfather probably says.
That means you’re going to have to earn that money. Here are a couple of ideas that may work for you:
Sell Your Stuff
Make this the year that you finally have that yard sale. If you don’t have a yard (and don’t dig the idea of home-based retail), take your old threads to a local consignment store, have them do the selling, and then share the profits. Pawn shops and online auction houses are also great places to turn your old stuff into the instant cash you’re looking for.
Get a Side Gig
Places like restaurants, warehouses, and grocery stores have available hours around the clock to work against a full-time job. And if you have a car, delivery and rideshare options like DoorDash, Lyft, and Uber allow you to set your hours and work when you want to. This may be a helpful option if bad credit has ruined your job search.
Sites like Plumfund and GoFundMe give people a chance to send money to cover rent, costs for people who can’t pay their bills, emergency car or home repairs, and unexpected medical expenses.
If you don’t want to get a loan, know that earning the money you need may take longer than borrowing it from a lender. But if you can make cash fast while you avoid debt, we highly recommend you do it!
Getting Instant Cash
When you need instant cash, the time and mental focus you need to make sound financial decisions can get cloudy. The pressure to fix your problem can be so significant, you may look over some of the responsibilities—and consequences—that come with taking on an instant cash loan.
This is why it is important to remember that an instant cash loan delivers quickly and conveniently as it provides you with financial relief. And without proper management, that debt can get out of control quickly.
In a world where you need money right now and can get cash advances with lightning speed, you must remember to slow down the process of looking for a loan to make sure that you are educated on every aspect of any cash loan you acquire. Know the terms of any loan application you fill out. Borrow only enough instant cash to meet your financial needs. And always, ALWAYS pay back the money on time.
No matter what your financial situation is now, remember that your long-term financial health can be responsible for a large part of your happiness. That means that even in our most desperate times, we have to plan for the times we won’t be struggling and remember what we do now determines so much. For example, if you need to finance a wedding ring it may be tempting to take out a large loan. But, this may not be the best decision long-term. No financial decision is to be taken lightly.
Do what you can to learn the specifics of your instant cash loan so that your short-term cash problem doesn’t turn into a long-term financial burden.
Eligibility For Instant Cash Advance Loans
Ultimately, the lender decides if a particular borrower is eligible for a loan. Direct lenders will usually look at the following factors when determining loan eligibility:
- Income: Most direct lenders require that borrowers have a steady stream of income to ensure they have the ability to repay their loan. According to the U.S. Census of 2021 the average people who live on their own or who share their residence with unrelated individuals earned an average yearly income of $41,797.2
- Employment Status: Lenders may also look at your employment history to see how reliable your income is. For example, if you show a history of being unable to keep a steady job, this may be a red flag for a lender.
- Existing Debts: Your lender may also want to know how much debt you currently owe. If you are currently dealing with quite a bit of debt it may be in your best interest to consider refinancing or paying off some balances before you apply for an additional loan.
- Credit Score: Direct lenders will also want to take a look at your most recent credit report and credit score. While having a less than perfect credit score may not be a deal breaker for all direct lenders, they will still want to review your information to confirm you are not currently going through the bankruptcy process or pre-bankruptcy counseling.
FAQ: Instant Cash Advance Loans
The regulations and restrictions for quick cash loans vary by country and even by state within countries. In the United States, for example, some states have caps on the interest rates that direct lenders can charge, while others do not. Some states also have laws about the maximum amount of money that can be borrowed, the terms of repayment, and the number of personal loans a person can have at one time. It’s important to research the specific regulations in your area before taking out a loan.
The interest rate you can get on an instant cash loan will depend on a variety of factors including your credit score, income, and the lender’s terms. It’s a good idea to shop around and compare rates from different lenders before deciding on a loan.
The amount of money you can borrow with an instant cash loan will depend on the lender’s terms and your income and credit score. Some lenders offer larger loans than others, but it’s important to only borrow as much as you can afford to repay.
Payday loans are short-term loans that you typically repay on your next payday. Furthermore, payday loans are often used for emergency expenses when you need cash quickly.
Yes, many payday lenders and direct lenders offer online applications. This can be a convenient way to apply for payday loans, as you can do it from the comfort of your own home.
Most lenders require you to have a bank account or checking account in order to receive a cash advance online. This is because the lender typically deposits the loan funds directly into your account, and they may also require automatic repayment from the account.
When you submit a loan request, you typically need to provide your personal information (like your name and address), proof of income, and bank account details. Some lenders may also ask for additional information.
A direct lender is a lender that directly provides you with the loan, rather than acting as an intermediary. This can sometimes result in faster same day approval and fewer fees, but it’s important to shop around as terms can vary between lenders.
Some lenders may offer alternatives to traditional credit checks, such as checking your bank account information to assess your ability to repay the loan. However, these alternatives can still impact your credit, so it’s important to understand the lender’s terms before applying.
Some direct lenders offer same day approval for quick cash loans, especially if you apply early in the day. However, it’s important to note that approval times can vary and it may take longer to actually receive the funds.
A Word From CreditNinja
Cash apps may also be an option. But knowing which is the best app to get an instant loan is important. It’s always important to do your own research and understand the terms of any loan before you apply. CreditNinja recommends shopping around, looking at online reviews, and calling lenders directly to speak with a loan agent. If you are going through a financial emergency and have absolutely no other options available, consider a streamlined personal installment loan with CreditNinja!