Examining Instant Decision Loans: Secured and Unsecured

Instant decision loans are a quick method for getting money fast. Instant decision loans can come in the form of secured loans or unsecured loans.

Instant decision unsecured loans based on excellent credit are well-suited to borrowers who need cash in a hurry. These are solely based on the borrower's credit history and apparent ability to repay the debt. These loans are typically offered by prime lenders to borrowers with excellent credit, and they come at a better rate than just about any other loan, especially other instant decision loans. If you are considering taking out a loan, then you should speak with bank or credit union representatives first about an unsecured loan before moving on to other options. If you do not currently qualify, discuss with a prime lender how you can improve your credit. If you can defer the loan until your credit has improved enough to get a secured loan, you will have improved your finances in several ways. However, do not actually apply for the loan if your credit history is spotty unless you do so at the recommendation of a trusted financial advisor who is aware of your circumstances. Being denied a loan will hurt your credit history and your efforts to secure the best possible loan.

Secured loans are based on collateral, meaning that you have to offer up your assets to assure the lender that your debt will be repaid whether or not you abide by the repayment scheme. For larger loans, these assets may include their property. For smaller, instant decision loans, you may take out a payday advance, where the collateral you offer is a post-dated check for the amount you are borrowing plus a finance fee. If you do not repay the loan within the time period agreed upon, then the collateral will become the property of the lender as repayment. In the case of the payday advance, the post-dated check will be cashed by the lender so that the lender gets first dibs on your paycheck.

Advance payday loans are the most common form of instant decision loans utilized by borrowers with poor credit and without other collateral to offer than their paycheck.  Payday advances are typically based on your monthly income (for which you must provide proof). Whether it is a check or your personal property that is put forth as collateral for a secured loan, it is possible that you will lose far more than the loan is worth by taking out an instant decision secured loan. Putting a $12,000 car down as collateral for a $5,000 loan is a losing deal should you renege on the loan repayment, and you are agreeing to a bad deal by writing a $575 check for a $500 loan. That $575 will come out of your bank account before any other cash can, regardless of whether you really have the funds to pay off that debt on payday. If canceled or bounced check fees result from the check being cashed by the lender, then you have yet more fees to pay due to the loan. Hence, while you may get an instant response regarding an instant loan, you should not make the decision to take out the loan too lightly.



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