The computer is defective and has to be replaced, an expensive car repair is pending, and a new closet is desired for the living room at home: If you haven’t saved any reserves in this case, you opt for an installment loan. Of course, you could ask your house bank for an offer. However, an instant loan is much faster and cheaper. It has to be completed online, the loan amount is in the bank account within a few working days. So what do you need to know about the quickly available money and what should you watch out for when applying?
What is an instant loan?
If you want to apply for a classic installment loan, contact your house bank and request an offer. If you want to save money, carry out an interest comparison beforehand and look at which banks offer low interest rates. A comparison can be made with an online calculator on the Internet within minutes. Until your loan application has been checked and approved and the money is in your account, you can expect an average processing time of ten to 15 working days. In urgent cases, the credit check and approval can take too long.
In the case of an instant loan, the credit check and approval are carried out within a few minutes. This is possible because you enter all the key data for your loan online and because it is checked online by the bank. Based on the framework data of your financing and your personal details, the bank analyzes whether a loan approval is possible. You will usually receive the notification on the same day. This is possible because your creditworthiness is checked online using your data. An inquiry to the credit protection association is also carried out online, so that the decision of the bank is binding despite the short processing time. With urgent credit requests, you have the necessary certainty within a few hours.
How does an instant loan work?
The instant loan is a classic installment loan with a direct credit check. Apart from the accelerated processing, it works like a normal consumer credit. After the money has been paid out, you must repay your loan in the form of monthly loan installments. These are fixed during the term of the loan and remain constant, so that you know from the start exactly what you have to expect per month. Your loan repayment usually begins on the first of the following month after the payment. Some banks offer the option of being debt-free more quickly thanks to free special repayments or early repayment.
What are the advantages and disadvantages of an instant loan?
Like any financing, an instant loan with online application has some advantages and disadvantages. You should know and check these before you decide on quick and convenient financing.
A quick and cheap loan for urgent cases
The biggest advantage of an instant loan is surely the immediate credit check and the fast payment. If you need money urgently, financing with immediate review and approval is a good alternative to the conventional installment loan. Since the loan amount is paid out within a few working days, a longer drawdown of your expensive overdraft facility can be avoided. The overdraft facility is presumably granted in your account and is immediately available to you, but it is also significantly more expensive than your instant loan and should therefore not be used in full or over a longer period of time.
If you apply for the instant loan online and also carry out a credit comparison online beforehand, you also have the option of financing at attractive interest rates. The comparison calculator helps you to compare the best providers for your loan request within a few minutes and thus find out where you can finance quickly and inexpensively. This means that an instant loan is ideal for anyone looking for attractive interest rates and who need money within a short time.
Every instant loan must be repaid
The biggest advantage of online credit is also its disadvantage. If you look at the often striking and appealing advertising, you easily get the impression that every purchase can be financed and that almost everyone can get a loan without any problems. Austrian banks are committed to responsible lending. Although the granting of finance is one of the most important business activities of a bank, the creditworthiness of the borrower is important. If you already have several loans so that the regular income is not sufficient to meet the payment obligations, you can expect the loan application to be rejected.
Even if you have negative entries with the credit protection association, it is likely that the bank will reject your credit request. Under these conditions, the risk to the lender is simply too great that you will not be able to meet your payment obligation in the long term. In such cases, a credit request will be rejected for your own protection and to protect the lender. So before you apply for a loan, you should definitely check whether your monthly income is sufficient to reliably pay a loan installment over a longer period of time. If this is not the case, reduce the loan amount or extend the repayment period so that the rate fits into your financial budget. In such cases, however, it is even better to forego the loan altogether.
How do you apply for the online loan?
For you as a borrower, an online loan must be applied for within a few minutes. If you use a comparison calculator, you only have to enter the desired loan amount, the term and the purpose. Free use makes sense, because then you can freely decide what you want to use the money for. You do not have to worry about significant interest rate differentials if you decide to use the loan flexibly. The online calculator uses this data to calculate a comparison of the best offers on the market. To do this, he accesses the conditions of all banks that are eligible for your financing. From the overview, you can branch to the detailed conditions of the providers and check whether they meet your expectations. Select the bank from the overview whose offer suits you optimally.
In the next step, you only have to determine your personal data to the bank. With the help of the credit data and your individual details, the bank checks online whether a loan approval is possible. You will usually receive the notification from the bank on the same day by e-mail, and some providers will immediately give your approval or rejection online. If you are approved, the credit agreement will be sent to you by email. Print out the contract, sign the document and return the documents to the bank. Don’t forget to add the requested personal documents like your last two or three payslips and a copy of your passport. Which systems you have to submit varies slightly from provider to provider. However, you will find out in the credit agreement which documents you have to present for the final processing.
The last step is the authentication test. By doing so, you demonstrate that you are the person you specify in your application. Some banks offer legitimation as an online or video procedure. The faster you have carried out the authentication, the faster the bank will complete the loan documents and arrange for the payment to be made to your account. It is therefore hardly possible to carry out an interest comparison and apply for a loan faster and more conveniently than with an online calculator.
Why is a loan comparison so important?
Even in a hurry, you should compare interest rates before applying for your loan. This also applies to your instant loan. The granting of finance is one of the most important tasks of commercial banks. It is a lucrative business that brings attractive profits to banks. That is why almost all large banks are in constant competition for customers with a secure income. This competition is the reason for enormous interest rate differentials. The first glance at your loan comparison shows you how big the differences between the banks in terms of interest rates and other conditions are. With a higher loan amount or a longer contract term, you save money by comparing interest rates. The interest charge can vary by a high three-digit amount between the cheapest and the most expensive provider. If you do not want to finance unnecessarily expensive and are looking for tailor-made financing, you should compare the interest rates before signing the contract.
Who is an instant loan suitable for?
In principle, the online loan is suitable for every borrower. Of course, it is particularly useful if you need money in a hurry. But even if you want a convenient application process and want to carry out a comparison beforehand, an instant loan is a good idea. You have to know that Austrian banks only grant online credit under certain conditions. To do this, you must have reached the age of 18 and have a fixed income. As a rule, permanent residence in Austria is required. A negative entry in the KSV must not exist. The self-employed must expect additional requirements if they want to take out an instant loan. Additional collateral may be required here, which you can provide, for example, with a second borrower with a secure income.