Many individuals require money urgently for a financial emergency like medical expenses, home or vehicle repairs, legal expenses or similar reasons. Though they may be eligible for a bank loan from their bank, they cannot afford to wait for a few days, to access the money after completing the paperwork. Hence they are interested in finding a lender who is offering instant loan approval, who will process the loan application quickly after it is submitted, so that they can access the funds they require in their bank account within 24 hours of getting loan approval.
Online
If a person wants to get a loan application processed quickly, it is advisable to use an online lender since they will usually automate the process of loan approval. For getting the loan, the borrower will first have to register at the lender website. Then he will have to provide personal information including income details and details of the bank account where the loan amount should be deposited, if the application is approved. In most cases the borrower will also have to authorize the lender to directly debit the bank account where salary is deposited, to repay the loan amount.
Loan application
The lender will first check the loan application to verify that all the information which is provided is valid and correct. Most lenders have formulated their own criteria for approval of the loan based on risk factors and repayment. Usually salaried employees will not face any problem in getting their loan application approved, especially if they are working in a reputed company. Self employed individuals, professionals or business owners may have to provide more information like their income and expenses which will be considered while approving the loan. The credit score is also considered, especially for non-salaried individuals.
Loan approval
The lender will usually have an algorithm for processing the loan application, based on the loan amount, repayment period, salary or income of the applicant, credit score and other factors. If the loan application is meeting the criteria which are specified, the loan will be approved immediately after the application is submitted. The borrower will be informed that his loan application is approved on phone or by email. The loan amount will be disbursed into his bank account immediately, usually within one business day of loan approval, so that he can use the money as he wishes.
While there are many advantages of getting loan approval immediately, some borrowers may face some problems. Since the loan approval or rejection process is automated, it is usually more difficult for a person whose loan application is rejected to find out the reason for rejection. Typically most lenders are only approving salaried individuals, so self employed persons will find it more difficult to get a loan. It is also important to check the terms and conditions, like the interest rate charged, and penalties in case of non payment of the loan before applying for the loan. Often the interest rate for these loans is higher than conventional bank loans, since they are processed quickly.