Important to instant loan
- Fast on the account
With the instant loan, the payout is already possible after 24 hours – because after a shortened credit check, you will receive the instant acceptance upon acceptance. In addition, some providers pay by flash transfer.
- Pay attention to interest costs
Even if time is scarce, an operation performed at rest loan comparison pays off: With the interest rate differentials can namely savings.
- Select short term
If you can pay high monthly installments, you should choose the repayment term as short as possible. Because that often reduces the interest costs.
An instant loan sounds ideal to quickly get money – of course, the completed loan but also be cheap. With a few tips, even with an instant loan favorable conditions can be achieved.
We’ll show you the criteria for selecting a loan with instant sign up, and how it works the way to disbursement – so that the loan amount will quickly land on your account.
Tips for a cheap instant loan
When you apply for an instant loan, you should first pay attention to what is generally important for a loan: the annual percentage rate. As a rule, this is slightly higher than for normal installment loans. Because the simplified credit check – which ultimately allows the fast payout – means for the bank an increased risk of default, which can pay for this with a higher interest rate.
Think carefully about what term you choose for your loan, because shorter maturities also mean a shorter exposure, whereas longer repayment terms can reduce monthly payments, but overall can lead to higher costs.
There are also some tips and tricks that can help you lower your credit costs:
- Find second borrower
If you specify more than one borrower, for example your partner, the bank will also have more collateral. Accordingly, the loan offer may become cheaper.
- Offer collateral
If you provide the bank with additional collateral, this reduces the risk of default – and thus also the interest rate with which the bank previously paid for the increased uncertainty.
- To arrange special repayments
If your instant loan allows special repayment, it can significantly reduce the financial burden. Because if you have unexpectedly (or already calculated) larger revenue, you can use it to pay off part of the loan. This in turn lowers the remaining installments.
For more advice, see our article on cheap credit.
You should also check in advance if the bank requires a fee for the loan commitment. This is still possible, although credit processing fees are no longer allowed since a judgment of the BGH in 2014. In addition, these fees do not have to be included in the annual percentage rate, so this is a pretty well hidden cost. However, such so-called commitment rates are rather uncommon for instant loans.
Remaining debt insurance does not always make sense
Banks often offer a so-called loan loss insurance when they take out a loan. This residual debt insurance comes into play if you can no longer pay the installments through no fault of your own. However, this insurance makes sense especially for high loan amounts, or if a long term has been agreed. Otherwise, these costs can be saved.
Avoid dubious providers
Imprudent instant credit providers recognize that they do not demand any collateral. Instead, they often expect a fee to be paid in advance regardless of a successful mediation. The coupling of the loan to another contract – such as insurance coverage – or the transfer of data to third parties are not uncommon.
From application to payment: The way to instant loan
In order to get an instant loan from an online bank, there are a few extra steps required in addition to the regular processes. First of all, you should check whether the quick cash requirement can actually be best satisfied with a quick loan (more on that below as a tip).
Use our loan calculator to find the best deals for you. Enter only the required loan amount and the desired term – then you will get an overview of possible credit offers with example calculations. Here you can easily see which loans would be cheap for you, and which are more associated with higher costs.
Non-binding credit offer received (Private creditneutral)
- Compare offers and complete online application
When submitting an online application, state how much credit you need at all – that is, what loan amount you want at what time. Note that a shorter term also means a shorter financial burden – but also a higher monthly rate. Then enter data about yourself and possible other borrowers.
- Self-assessment of income and assets
In order to check your creditworthiness, the bank needs some information about your financial circumstances.
- Preliminary commitment by the bank
Taking your details into account, you will now receive a provisional commitment upon acceptance. For now, because only a simplified credit check has been performed.
Send signed documents
- Sending the self-assessment documents to the bank
Now send the documents to the bank to prove the accuracy of your information.
- Binding commitment of the bank
After examining your documents, the bank will now give you a binding acceptance upon acceptance.
- Receipt of the loan documents
You will now receive the loan documents – often you can download and print these directly – and a slip to carry out the Postident.
- Return of the loan documents
You then send the completed loan documents to the bank. In addition, you will have the identity check performed by a post office employee to confirm your identity.
Examination of documents and loan payment
- Examination of documents by bank
The credit bank now checks the submitted documents for completeness.
- Payment of the loan amount
In the last step, you will already receive the agreed payment of your loan. Some lending institutions use flash payments, so you can get the money the same day.
Check alternative financing options
Due to the very high costs – as the bank can pay for the quick provision of money with higher interest rates – but other methods of financing are mostly recommended. Conceivable are:
- For consumer goods, about zero-percent financing through the dealer – however, consumer advocates warn that this encourages impulse buying; So customers are willing to pay higher prices than actually necessary.
- For invoices, the agreement of a installment payment directly with the biller – of course, the biller has to meet you, of course, and get involved in the payment in parts.
- Lending privately, such as friends or family members.
Instead of the Postident procedure, some online banks use the BaFin-approved identity verification process via videoconferencing. You usually receive a provisional commitment from online banks directly after the application has been submitted; the binding commitment usually takes place one day after you have submitted your documents. However, the credit check may take two to three days to complete.
Required documents for fast loans
In order for you to receive your instant loan quickly, you should have all the necessary documents ready.
The documents required for an instant loan vary slightly from bank to bank. Usually, however, the following is required:
- Salary statements for the last three months
- Proof of further income
- Information on running costs (mostly bank statements of the last month)
Should it emerge from these documents or the inquiry of the Private credit data that your creditworthiness for the credit is insufficient, your application will be rejected despite the previous, noncommittal commitment. If your application has barely failed, you may, in consultation with the bank, be able to submit a new loan application for a slightly lower amount or with a longer term, which will then be approved.
Pay attention to the completeness of the documents
Unfortunately, a frequent reason for rejection is incorrect or missing documents. Therefore, check the documents very carefully, because if you really need the money urgently, it is very annoying if the application is only rejected because of a formal error.
questions and answers
What is an instant loan?
An instant loan is basically a normal installment loan, but the credit check is simplified, so that the loan can be approved and paid very quickly. In addition, the loan amount is usually limited to 5,000 euros. After disbursement, an instant loan no longer differs from a regular installment loan. Before that, however, there are clear differences.
How fast will I receive the money?
The loan payment is possible 24 hours after the credit check. But even if one speaks of an instant loan, from the first application until the payment is more likely two to four days realistic, due to identity verification and maturity in the mail order.
Here is a more detailed breakdown, which contains rough times:
- Non-binding commitment: Immediately
As a borrower, if you complete all the required documents, you will actually receive a commitment directly, provided that your loan is approved. In most cases, however, this commitment is not yet binding, especially if you have applied for the instant loan online. The commitment is subject to the credit check, which also includes a query of the Private credit data by default. An instant loan for the unemployed and other people without a regular income is therefore excluded.
- Credit check: approx. 1 workday
The credit check is usually completed on the same day or the next working day at the latest, so that you receive a binding commitment from the bank.
- Payment: approx. 1 to 2 business days
With a branch bank an immediate payout is then possible, with online banks you usually have to take into account the usual terms of transfers – but some banks also offer lightning transfers, which are in any case received the same day. In a branch bank, you can in the ideal case actually receive the money on the same day, but more usual are usually one to two days to disbursement.
Is there an instant loan without Private credit?
In principle, instant loans are also possible without Private credit query, but only a few German banks refrain from such a credit check. Such loans are therefore often offered by foreign banks, for which the Private credit data play only a minor role. However, a sufficient credit rating is also a prerequisite for a payout.
In addition, the banks usually require a much higher interest rate and the payoff takes more time than German banks. An instant loan without a Private credit query should therefore only be an emergency solution if the money is really needed urgently, but there is no other way to finance it.
Why can an online instant loan be faster than a branch bank?
The biggest advantage of an online instant loan is the immediate provisional commitment. For a branch bank, on the other hand, you would first have to arrange a consultation appointment, which rarely takes place on the same day. While time is spilling into the country, you have already submitted all documents online and possibly received your confirmation.
And even if the payout in the online process can take between one and two working days, the branch bank rarely recovers the time difference that arose during the consultation.
What advantages and disadvantages does an instant loan have?
One of the biggest advantages of an instant loan, of course, is the short-term commitment and the quick availability of the borrowed money. It enables earlier planning of projects. On the one hand, strong competition among providers increases the likelihood that they will generally be granted an instant loan. On the other hand, it increases the chances of a low lending rate.
However, instant loans also involve risks. Most of them are based on the applicant’s situation: those who need credit immediately sometimes forget, given the urgency of scrutinizing all conditions and making comparisons. This can cause the loan rate to be unnecessarily high or other conditions inappropriate. In addition, comparatively many dubious providers make use of this circumstance. After all, the instant loan is not suitable for larger sums and long-term planning such as those required for mortgage lending.
Is not it easier to overdraw the account instead of applying for an instant loan?
Basically yes, but you should not disregard the high disposition and overdraft rates. Sometimes you pay 12 percent and more for the overdraft – as an instant loan is often considerably cheaper.
Does the instant loan affect my Private credit badly?
With the conclusion of a loan, this is communicated to the Private credit and other credit bureaus. A structural deterioration of the entry thus does not occur automatically. Although banks now learn that you are repaying a loan with part of your income, if you successfully repay the instant loan, this will also be noted positively in the Private credit entry.
Incidentally, there is no difference to a regular loan with an instant loan, because the speed of the payment is irrelevant for the Private credit entry.
Can I have the instant loan freely available?
In principle, yes, because similar to a regular installment loan and the instant loan is free for the purpose. However, if you have already decided on a loan application for a fixed purpose, and for example could benefit from more favorable interest conditions, this must be adhered to.