Personal loans can be acquired instantly. It has become an easy and fast way in getting money without having to wait for the approval process to get over. Applicants with a good credit history can avail instant approval for a loan. However, the negative point about these loan approvals is that what is advanced with ease is made up with the high interest rates that one has to pay against the loan amount. In such cases it seems better to negotiate terms for interest rates with a bank rather than applying for an instant approval.
Difference between normal approval of loan process and instant approval
The processing time in normal approval of loan process is much more than instant approval. The applicant needs to fill out forms which are then sent for verification before the loan gets accepted.
The loan amount in the case of normal approval is decided by the financial institute on the basis of certain criteria. It is therefore not always the same amount of loan as desired by the applicant that gets granted. This makes the applicant look for other loan options. In an instant approval, however, the loan amount mostly remains the same as desired.
Normal approval of loan requires the applicant to fulfil certain criteria. The annual income of the applicant and financial status are considered to get the loan amount approved.
Instant approval is not based on the applicant’s credit history. An applicant with bad credit history can also get instant approval for his loan. In normal loan approval process, the credit score of the person plays an important role. A person with bad credit history is sure to face problems in getting his loan approved while it will be easier to get a loan approved if the credit score is good.
Instant approval gives the applicant the chance to meet his financial crisis. Sometimes, emergencies need to get addressed immediately and in such cases waiting for the loan to get approved by banks may prove to be time consuming.
People can save themselves from taking pay day loans which have higher interest rates attached to them.
Instant approval of personal loans however has some riders attached to it. Since the lender agrees to loan a substantial amount of money without much verification, some of them demand collateral till the loan gets repaid. Some financial institutes also take the opportunity to charge more interest rates and earn profits.