An unsecured personal loan can be a bit hard to qualify for as they are approved based on your affordability. These loans are not subject to collateral whether you borrow a small sum or a large sum of money.
Various short-term loans are signed off on instantly. You just need to fill in the application form, and then a lender will quickly assess your repaying capacity. This process takes a very short time, so you are able to get money in your bank account the same day.
Regardless of the size and term, all loans are unsecured and do not require collateral. However, it does not mean that all personal loans will be approved this instant.
Emergency loans are instantly approved
Emergency loans are small loans that you take out to tide over when unexpected expenses catch you by surprise. You cannot wait to have stashed away money to fund these expenses so that you will need money as immediately as possible.
There are various emergency loans that a lender can offer you, and they all have different features catering to different buyers:
• Payday loans
Payday loans have been exclusively aimed at helping bad credit borrowers. These loans are small unsecured loans. You do not need a guarantor and collateral to apply for this money. The repayment term of these loans is not more than 14 days.
These loans are aimed at those who cannot afford to have run a hard inquiry on their credit report.
• Loans for unemployed
You may struggle to meet your daily expenses when you are out of work. Despite your savings, you will feel like being in a tight spot. As a result, you will likely borrow money from a direct lender. Loans for unemployed with bad credit also require no guarantor. However, they are different from payday loans.
While these loans are aimed at full-time employees, loans for the unemployed require you to have a passive income source. In case you do not have any side gig, unemployment benefits will be considered your income.
Large unsecured loans are not approved the same day
Not all personal loans are emergency loans, so it is not possible for you to get approval the same day you put in the loan application. These loans are simply known as unsecured loans.
You may need a large sum of money as well. For instance, you may need money to fund your wedding expenses, buy a car, etc. As you are borrowing a large amount of money, your lender will also check your credit rating.
After going through your credit report, they will assess your financial capacity. Loaning a big amount of money means taking on higher risks. A lender will deliberately make a lending decision, so it may take a couple of days to get approval.
However, when you apply for these loans with a broker, it will take a longer time. Therefore, if you still want quick approval, you should consider no broker unsecured personal loan.
How can you get large unsecured loans fast?
Experts say, “The stronger your credit report is, the sooner you will get a loan.” A lender will not make it complicated for you to borrow money when you need it for emergencies. However, they will be sceptical about your repaying capacity when you borrow a large sum of money.
You should try to follow the following tips to make your credit application stronger:
- Make sure you have not maxed out your credit card.
- Keep the credit utilisation ratio up to 25%.
- It is a good sign if you have not owed money at the time of applying for a personal loan.
- If so, keep the debt-to-income ratio as low as 30%.
- Marks of missed payments should not be recent.
- Try to increase your income.
- If bad credit is a snag, you should try to apply with a co-applicant or arrange a guarantor.
The bottom line
You can get an unsecured personal loan with instant approval as long as the borrowing amount is small. This generally happens when you need money to fund unforeseen expenses. Emergency loans require no guarantor and collateral so that they can be approved faster.
Another feature of these loans is that you do not need to bear hard search footprints. As no credit score is checked, it saves processing time. The approval process may be even faster when you directly apply for a loan from a lender.
However, when you take out a larger sum, the loan might not be approved immediately. A lender will run your credit check and may ask you for additional documents to support your income. It may take a few days to finish the processing. However, it is still faster than you may wait when applying with a broker.
When taking out a loan, you should always ensure your repaying capacity. In the end, it is your money, your life. A lender will assess your repaying capacity before loaning you. But you cannot simply rely on them. You should take the responsibility on your own.