Sometimes we find ourselves in very bad financial situations. We need extra money to pay our bills and to make ends meet. To be able to do that we usually apply for a loan. What we usually choose is a personal loan firm that offers instant approval. But is that a good idea? Are there any risks related to picking the easiest way of borrowing money or is it just as pleasant as it seems? What should we know about borrowing in general and pay special attention to when we choose our lender?
Fast but expensive
A great advantage of borrowing money from an instant approval firm is that you can be qualified the same day you send an application. The money will be sent immediately after that. You just need to have stable employment, share information about your income (which has to be regular if you want to qualify) and current bank account. What might be a burden for a lot of people is that interest rates and fees are likely to be very, very high. This is somewhat understandable– having little to none information about you, the lender has to be safe and get at least part of their money because there is a chance that the client will default.
Past doesn’t matter but data does
Your credit history doesn’t matter – you can be qualified even if your credit is bad and you have defaulted many times before. That is a good option when you have an emergency and no other way out but to borrow money from a personal loan firm. You can pay your bills, buy food when you’re starving, etc. It seems like a very attractive offer, but there is one flaw: you share your personal data with a new, strange firm and you have to keep in mind that it may be sold or used for different purposes. If you aren’t sure about a company, at least do research or ask friends about it. Even nowadays we should be suspicious while giving out your personal information over the Internet.
No “face to face” contact = debt trap?
What is good about instant approval loans is that you fill all the forms online and you don’t have to leave your house even for a minute. It is a great thing, you don’t have any interaction with company workers or passers-by. What is more, you can decide by yourself without any pressure and stress connected with visiting a new place. You can take your time and fulfill all the formalities in a comfortable environment. That makes applying for a loan a very nice experience… Not something you do once to solve your problems, instead you do it repeatedly. After all, it seems a great option – you want money, you click a button and it is on your bank account. Sooner or later you may find yourself in a debt trap – you take out one loan to pay off the previous one.
Before you decide whether you need a loan or not, think about all the pros and cons. It is advised to do research, look for different opinions and be extra-cautious while filling all the forms, sharing your personal data. A very important step before even doing the research and preparing yourself for taking out a loan is assessing your situation. Is it really bad? Do you desperately need money or is it just a temporary hindrance that might be solved differently? Borrow your money only if you’re in an emergency, for example, you expect disconnection of your utilities. If you want to buy something nice, don’t apply for an instant approval loan. It is reserved only for a real emergency.