First of all, do you understand what options you have if you do need instant decision unsecured loans? If you have good credit, then you actually can get such a loan relatively quickly from a reputable bank such as Wells Fargo, Citigroup, or Bank of America. Each of these institutions offer personal unsecured loans, but you do need to have a good credit score and you will have to take out at least a 3000 loan. While these loans may not technically be classified as ‘instant decision’ loans, they can get back to you within a couple of hours and have the cash in your account by the next business day, which is pretty fast for regular loans that won’t cost you much. If you can qualify, this is the loan you want to take out – it’s cheap, and you can pay it back over time.
However, what can you do if you need instant unsecured loans with bad credit? Well, you have two main options:
- Find a co-signer with good credit who is willing to help you get a personal loan from a bank
- Find a bad credit lender (payday lender) who is willing to extend you a loan
Obviously, from a cost standpoint option number 1 (finding a co-signer) is a MUCH better option. Even if all you need is a 1000 loan, you would be better off taking out $3,000 from a bank than $1,000 from a payday lender – your fees will be less, and you will have longer to pay off the loan. However, in case this is not an option, it’s best that you know what you are getting into by taking out instant decision unsecured loans from a payday lender.
How Payday Loans Work
Payday loans are very simple. They are high-cost, short-term loans that are meant and designed to be used in emergency situations (contrary to many advertisements, these fast cash loans should not be used for anything other than absolute emergencies). Basically, you only need to have a job that pays you more than $1000/month and have a valid checking account in order to qualify, and they literally give you the cash immediately. You then have to pay back the loan plus the interest and fees by the time your next paycheck comes.
While payday loans sound simple and easy, in practice they can be very difficult to pay off because of two simple facts: You only have 2 weeks to pay them back (some offer 30 day loans), and the average APR on the loan is above 400% – in other words, if you borrow even just $1000 you will have to pay back approximately $1,200 just two weeks later. If you don’t have that amount of cash now, will you really have it in 2 weeks? Only if you can answer a very truthful ‘yes’ to that question should you consider taking out the payday loan.
Bottom Line
If you see an advertisment claiming ‘unsecured loans, instant decision’ you now know what you need to be careful off. Don’t simply take out the loan because it’s easy money – make sure you have the ability to pay it back and that it will help you long-term to achieve your financial goals.