Most people desire personal loans to fulfill many financial obligations, both short-term and long-term. And if they can get a loan at an interest rate that is affordable to them it is even better. Next only to interests rates is instant approval of loans, on top of the list.
Instant approval of personal loans in today’s scenario means a loan can be sanctioned in less than 24 hours if all parameters are met and factors such as the credibility, financial health and personal details of the loan seeker are verified. However, instant loan approval can also be within the stipulated loan approval period indicated by the lender; this is not always adhered to by lenders.
Instant loan approvals are very popular all over the world. But not all are trustworthy and scrupulous.
Firstly, let’s take a look at how instant loan approval found a place in lending. In times of economic depression and downturns, financial liquidity becomes a problem and several people resort to personal loans, which is mostly an unsecured loan. So, this can be applicable to working people with salaries and those who run small businesses and are looking to pump cash as capital.
Lenders are quick to cash in on people who require immediate loans at instant approval; by far many people with bad credit are generally victims of circumstances. Most do not default on loan repayments unless they have lost a job or had losses in business. They have every intention of paying back their loans. Lenders of instant approval loans are smart enough to know that these people are in fact quite likely to recover their financial standing over time. They view it as an opportunity where the margin of return is quick and positive enough to recover loan amounts; by working on volume returns they are statistically able to improve Return on Investment.
This is borne out by the continued improvement in employment rates in the west over the past few years resulting in more lenders coming forward to offer loans to people with bad credit. The lenders are encouraged as they are confident that borrowers have the means to repay loans; they are not concerned very much with the borrowers’ credit history. This is true not only of salaried workers but also professional consultants and associates whose repaying capacity has improved as the US economy regains lost ground.
Lenders and lending institutions are walking in the footsteps of banks in attracting more clients by leveraging customer service and gaining customer loyalty. By being flexible in bending rules such as add-on loans, lesser interest rates and longer repayment periods, they are providing fair terms and conditions to improve the prospects repayment. It is in this area that instant loan approval provides better reach and greater access to people seeking loans.
Instant loan approvals are also justified in situations where emergency financial needs such as hospitalization, education etc. have to be met. While workplaces provide employees with payday loans for smaller amounts and shorter durations, instant loan approvals afford a quick and easily accessible means of availing financial help when absolutely necessary.
However, there is a need to be wary of unscrupulous lenders simply because of the fact that some of them will do anything to beat the competition, which in this case, comes from the banking sector. A Forbes review states that the market becoming more competitive is a good omen as it will drive the bad lenders away.