Accessing traditional loans can be difficult and time-consuming, especially for those with bad credit. Instant loans offer a faster, more accessible way to get the funds you need when unexpected expenses arise. These loans often have simpler approval processes, making them a useful option for those who might otherwise be turned down. While they can provide quick financial relief, it’s important to borrow responsibly and understand the terms before applying.
Key Points
- Instant loans offer fast approval, typically occurring just minutes after an online application is submitted.
- To ensure quick loan approval, lenders use automated tools to help verify borrowers’ financial information.
- Instant loans should be distinguished from ‘guaranteed loans’, which promise approval with no due diligence and are not legitimate.
- Trustworthy lenders will want to verify that you can repay the loan, which requires some level of financial assessment.
What Are Instant Loans?
Instant loans are designed to provide quick approval, often within minutes of submitting an online application. These types of loans rely on automated technology to quickly assess your credit profile and financial details, eliminating the need for a lengthy review process.
These types of loans operate similarly to instant approval credit cards. When you apply for one of these cards, the issuer uses digital tools to assess your eligibility right away and provide a response right away. While some may provide instant approvals, where you can move forward in the loan process, others may provide pre-approvals. With pre-approvals, it means you’ve passed the initial check, but final approval is not guaranteed. The lender still needs to verify your information before giving full approval.
| Instant Loans: Pre-Approved vs. Approved Loan Pre-Approval. With a pre-approval, your lender gives an estimate of how much you can borrow and at what interest rate, based on the information you provide. It may also involve a soft credit check. Online lenders typically issue pre-approvals instantly. However, pre-approval doesn’t guarantee final approval. Loan Approval. Official loan approval involves verifying that the information you provided is true. These lenders often use automation tools, helping them provide full loan approval in just a few hours. |
Instant Loan Features
Common features of instant loans include the following:
- Smaller loan amounts compared to traditional loans
- Short loan terms
- Quick approval, often within minutes of applying
- Instant funding after approval, usually via e-transfer
- Available online
Learn more: Instant Loan
Can You Get An Instant Loan With Bad Credit?
Eligibility criteria for these types of loans are very lax. In many cases, you don’t need good credit or any credit at all, depending on the lender.
For instance, lenders like Cash4You typically process online applications within an hour and often work with bad credit borrowers. Many other loan providers offer immediate pre-approval decisions to help you move forward quickly.
Example: iCash provides an instant response following loan application, even for those with low credit scores. If approved, funding can be provided within minutes via e-transfer.
| Note: Instant Loans vs. Guaranteed Loans Instant loans are usually legit and offered by licensed lenders who quickly assess your credit or income before approving you. Guaranteed loans, on the other hand, promise approval with no due diligence. This is a major red flag, as no legitimate lender will guarantee a loan without reviewing your financial information. |
Borrow Up To $50,000
What’s Considered As “Bad” Credit?
In Canada, a credit score below 560 is generally considered “bad credit” by most lenders. This score suggests a history of missed payments, high debt levels, or limited credit experience. Borrowers with bad credit may find it more difficult to get approved for a loan or may be subject to higher interest rates.
Types Of Loans You Can Get Instantly, Even With Bad Credit
If you need to borrow money right away, the best options are as follows:
| Personal Loans | A personal loan from an alternative lender, such as a credit union or private lender. |
| Payday Loans | A payday loan is a short-term, high-interest loan designed to cover emergency expenses, usually due by your next paycheque. |
| Credit Card Cash Advance | If you have a credit card, you can get a cash advance as a way to get cash instantly. Since you already have a card, there’s no need to apply for a loan. |
| Line Of Credit | – MoneyUp: MoneyUp offers a credit line of up to $1,000 to help consumers bridge the gap to their next paycheque. – Nyble: Nyble offers instant access to small credit line of up to $250 with no interest, helping users cover short-term expenses and avoid overdraft fees. |
| Cash Advances | – KOHO Cover: KOHO Cover gives KOHO users instant access to funds to avoid overdrafts and manage unexpected costs. – Bree: Bree provides interest-free cash advances of up to $500 to prevent payday loan reliance. |
Improve Your Chances Of Getting An Instant Loan With Bad Credit With This:
If you have poor credit that’s standing in the way of getting a loan, there are a few things you can try:
Avoid NSF Fees
Keep tabs on your bank account and make sure you don’t dip into negative territory for at least 3 months. Spending more than your bank account balance will incur NSF fees, which can be a bad thing for your credit. If you have bad credit and multiple NSF fees on your bank statements, lenders may see this as a red flag and may reject your application.
So, having zero NSF fees and overdrafts can be a positive thing for your credit profile and help improve your odds of approval.
Use A Co-Signer
If you have very bad credit or finances in general, finding someone to become a guarantor for your loan can help reduce your risk as a borrower and increase your chances of approval.
Otherwise known as a “guarantor loan”, this occurs when someone with good credit and healthy finances agree to co-sign your application and cover your loan payments, if and when you can no longer afford them.
Have A Bank Account
Many lenders may use instant bank verification (IBV), to skip the manual vetting process and use a third-party service to quickly and securely verify your bank account information and your identity. This process allows lenders to provide you with faster approvals and funding.
Apply For A Smaller Loan
Taking out a smaller loan amount reduces the lender’s risk and makes approval more likely, especially with limited income or bad credit. It also lowers your monthly payments, which can help you stick to your budget and avoid financial strain.
How Much Will It Cost: Payday Loans vs. Personal Loans
Payday loans are notorious for being the most expensive financing options around. To help you compare the cost of a personal loan versus a payday loan, check out the following chart:
| Personal Loans | Payday Loans | |
| Loan Amount | $1,500 | $1,500 |
| Loan Term | 12 months | 14 days |
| Interest Rate | 26% | $14 per $100 borrowed |
| Monthly Loan Payment | ~$143 | $1,710 |
| Total Interest | ~$216 | $210 |
| Total Cost | ~$1,716 | $1,710 |
What’s The Application Process For An Instant Loan?
To apply for a loan, follow these steps:
Step 1: Compare Lenders
To speed up the process of finding a lender, use an online loan comparison platform, like Loans Canada. Simply plug in a few key pieces of information about your personal details and financial health, and a list of lenders will populate. Then, you can compare them side-by-side to find the right lender based on your needs and credentials.
Step 2: Fill Out An Application
Fill out the lender’s loan application form completely and accurately, along with all requested documents. Ensuring accuracy is an important step to ensure faster approval with no hiccups.
Documents Required
Documentation required may include the following:
- Proof of income (i.e. employment letter, pay stubs, bank statements)
- Government-issued photo ID (driver’s license, passport, etc)
- Social Insurance Number (SIN)
- Proof of residency (lease agreement, utility bill, etc)
Step 3: Get Funded
The lender will process your application and determine your creditworthiness. Depending on the lender and when you applied, this can take as little as 1 hour. If approved, these lenders can provide funding via e-transfer in as little as 15 minutes.
| Note. If you’re a returning customer, your application may be able to bypass parts of the application process, helping to speed up approval and funding. |
Bottom Line
Whatever your financial needs are, a loan can help you cover the costs of most types of emergencies and get back on financial track. While you may not be able to get instantly approved for a loan (the legitimate way), it’s still possible to get approved for a loan very quickly following application. Just make sure you have all your documents ready to go to avoid any delays along the way.
