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Instant loan - how to quickly regain liquidity in financial emergencies

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Do you know the requirements for a favorable instant loan?

For the granting of an instant loan, as with normal loans, there are some requirements on the basis of which the bank assesses your creditworthiness. Only if you meet all the requirements, the instant loan can be disbursed immediately. Therefore, you should meet the requirements for an instant loan and be able to prove it.

In addition, some banks require employment with a domestic employer in a permanent employment relationship for at least 6 months and access to an online banking account.

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For whom is an instant loan suitable?

There are situations in life where a quick loan is very helpful. Situations in which 2 weeks of waiting time, as is not uncommon with a classic installment loan, is simply not an option. For example, when:

  • your car breaks down, on which you depend professionally
  • the roof of your home is defective and a land charge for the increase of the construction financing would take too long to repair the damage
  • you receive an unexpectedly high additional service charge payment
  • you have to pay a high medical or veterinary bill
  • or if you need to balance your checking account to avoid high overdraft interest.

In all these situations, taking out an instant loan makes sense and is recommended if you have no financial reserves to fall back on. The instant loan makes you quickly, easily and comparatively cheaply liquid again, so you can bridge your financial bottleneck with its help.

However, it should only be a financial bottleneck, an unforeseeable emergency. For the financing of consumer goods, spontaneous purchases such as a new cell phone or even the booking of a vacation, you should consider the conclusion of a quick loan very carefully - after all, you have to pay back the borrowed money including interest to the bank. If you have not yet managed to build up reserves for these consumer goods, you should ask yourself whether you are in a position to limit yourself financially in the future so that you can repay your debts.

What is the difference between a loan, an instant loan and an overdraft?

You may now be wondering what the differences are between an instant loan and an overdraft and a traditional loan?

The instant credit lies with its characteristics quasi between the overdraft and the classical installment credit. It is almost as fast and flexible as an overdraft facility, but as inexpensive as a normal loan.

The following table illustrates the differences and similarities between the three types of credit.

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6 tips to consider before applying for an instant loan.

1. compare instant loan online

Despite the time pressure you are probably under, you should compare different offers of quick loans. The conditions of the loan offers often differ significantly. An online comparison is suitable to find a cheap instant loan.

2. compare with the help of the effective interest rate

When comparing instant loans, you should pay attention to the effective interest rate, as with any other loan. This allows you to compare different offers, as it reflects the final monthly loan installment including all possible additional costs.

3) It is better to choose fixed interest rates than variable ones.

Some banks offer loans with instant approval with variable interest rates. This means that the interest rate, and therefore your monthly payment, can be adjusted to the general market rates. This can have a negative impact on your debt, as in the worst case you suddenly have to pay more interest on your instant loan. That is why we recommend you to take out a quick loan with fixed interest rates. The guaranteed interest rate and the constant installments give you better planning security.

4. agree on unscheduled repayments

Many banks offer free unscheduled repayments on instant loans. If you have unplanned more money available, for example, through an inheritance or a salary bonus, you can put the money into the repayment of your quick loan. You should definitely take advantage of this option and agree on unscheduled repayments with the bank before concluding the instant loan, or choose a provider that allows unscheduled repayments. 5.

5. use offers with installment breaks

In addition, look for offers where you can take a break in installments. Some banks offer the option of suspending the installment once a year without giving reasons after reviewing the previous loan repayment. This gives you additional financial freedom.

6. consider taking out residual debt insurance

Some banks offer a residual debt insurance to the instant loan. With this policy, you protect yourself and your dependents if you can no longer repay the installments of the quick loan due to involuntary unemployment, accident, disability or death. But residual debt insurance is often expensive, and you should carefully consider how great your risk of default is.

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High interest rates for short-term loans and emergency money loans

Quick loans usually start at an amount of €1,000. If you need a smaller amount to become liquid again in the short term, you can also apply for a so-called short-term loan. These are usually amounts between €100 and a maximum of €3,000, which land on the customer's checking account on the same day as the application. The money must be repaid in full within a very short term, usually 30 to 60 days. The fees for these loans are up to 14%. Even though at first glance this interest rate is only a small amount for the relatively small loan amount, you should be aware of the high APR; it is comparable to the interest on your overdraft facility.

FAQ

Do unemployed people get an instant loan?

The chances of getting an instant loan without proof of income are slim. A regular income is an important prerequisite for an instant loan. Unemployment benefits, Hartz IV payments or BAföG do not count as income. However, with some banks you can apply for an instant loan without proof of income if there is a second applicant or a guarantor. Please ask the bank of your choice directly for the conditions.

Do pupils, trainees and students have a chance of getting an instant loan?

Yes, some providers also offer instant loans for groups of people with a very low income. However, the credit limit is then severely restricted, usually to a maximum of €1,500. The fees for instant loans for pupils or students are often very high, however, so that you should check and question the offer very carefully before taking out the loan.

Can the quick loan be used freely?

Yes, an instant loan does not have a fixed purpose. However, it is recommended to use the instant loan only in case of financial emergency and not for the purchase of consumer goods or to finance a vacation.

Will the instant loan be paid out today?

That depends on how quickly you can meet and prove all the necessary requirements. If you submit all the documents and information to the bank in the morning, you have a good credit rating and, in the best case, have a checking account with the same bank, then it is quite possible that the instant loan will be paid out today.

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