Even when you are very far-sighted with your finances, no one is immune to unforeseen situations. When faced with an unforeseen event, you can count on your savings, on the support of a loved one or on credit. Among these solutions, a loan can be more economical when it is well chosen according to the different offers and your needs. With regard to emergencies, immediate credit is one of the so-called fast loans that help you in the event of the unexpected.
If before, it was complicated to get a loan on time, the internet and new technologies now make it easier to get immediate credit. The advantage of an immediate loan is that it allows you to have the necessary means to finance your needs within 24 hours after a request.
You can finance repairs to your home following damage, purchases, consumptions or repairs to your vehicle. Immediate credit can be granted by a bank, a credit intermediary or a purchasing store. But whatever its character and the type of immediate loan to which you resort, it is advisable to analyze well the risks associated with this rapid consumer credit.
What is immediate credit?
Instant credit is more a variant of quick credit, itself a consumer credit, than a full credit offer. Depending on the players, the supply of personal consumer credit can be more or less rapid. However, this depends on the speed with which a consumer loan file is processed, the method of subscription and the provision of supporting documents (online or not).
Today with the permission of regulation, immediate credit products are multiplying and the players are more numerous and competitive. Hence the interest in making a choice after having taken care to check the proposals of the various lenders on the market and to compare taking into account the Annual Global Effective Rate (APR) offered by the bank, the administrative fees and the cost. insurance if it is essential.
The immediate loan keeps the same characteristics as other fast personal loans, that is to say the absence of justification for the use of the allocated funds. You do not need proof for a loan amount less than $ 3,000. This is one of the reasons for the speed of credit issuance. The lender has the legal obligation to claim supporting documents in excess of $ 3,000 to prevent any insolvency and avoid the client any risk of over-indebtedness. Among the obligations introduced by the Lagarde law of July 1, 2010, the lender must give you, after an interview, a pre-contractual sheet containing information on your resources and your charges.
Types of immediate loans
As its name suggests, immediate credit brings together all quick-effect consumer loans. It concerns :
- immediate online loan, with advantageous rates and online subscription
- department store purchasing loyalty cards that allow you to purchase a product without having the money at the time of purchase. These stores also offer consumer purchase credit cards which can be requested on site and have the funds immediately after validation of the request.
- micro-credits which represent amounts between 100 and 600 € delivered in 24 hours, 48 hours to finance a repair, the payment of an invoice or any other emergency.
- immediate personal loan without supporting documents.
What steps to take to have an immediate loan?
Applying for immediate credit is a quick business. The request can be made by mail, telephone or online. The duly submitted request is promptly processed by the lender. If it is a bank, the application files and even the documents to bring can be submitted online.
For shopping stores, the request can be made on site via a loyalty card or with credit offers available on site. In general, for banking financial institutions, a loan request is processed within minutes of submission. After a first interview, the lender provides you with a pre-contractual information sheet. This sheet contains the various characteristic information of immediate credit:
- the type of loan
- the amount loaned, the amount due and the duration of repayments
- the interest rate applied to the loan, i.e. the annual percentage rate of charge (APR)
- the overall cost of credit with and without insurance, expressed in US dollars.
At the same time, on site or remotely, you must complete a dialogue form which informs the lender about your financial situation. At the end, the latter must give you, in case of validation of your request, a proposal for a credit agreement which must be signed.
How is the loan fund released?
There are two cases that arise depending on the lender. When you receive and accept an offer from a major distribution chain, the money is immediately available for your TV and appliance purchases in the store. It often becomes impossible to give up that immediate credit that you have contracted.
On the other hand, for a loan taken out in a branch or online with a bank, you have a withdrawal period during which you are allowed to revoke the immediate loan commitment without reason. Since May 1, 2011, the date of implementation of the Lagarde reform, the legal retirement period without consequences has been 14 days, including working dates and public holidays. To signify your change of mind, you must return the detachable withdrawal slip associated with the credit offer after signing it. After this period, the accepted amount will be delivered to your account for use.
There is, however, the possibility of speeding up the process in order to obtain the desired money sooner. The amount allocated is capped at $ 75,000 beyond which the loan no longer benefits from the protection of the consumer code. However, the smaller the amount requested, the sooner it will be granted for immediate use.
What about the repayment of this fast consumer credit?
Repayment is made by several payments each month or by a final payment at the end of the loan. The monthly payments are composed on the one hand of the principal and on the other hand of the interest of the loan. The amount of monthly payments is generally constant. For those who choose to pay term while waiting for money to come in, this only concerns capital. Interest remains payable monthly.
The repayment terms vary and can range from a few days for small loans to a few years for larger loans. The duration of consumer loans of less than € 3,000 for example is now limited to 3 years.
It may happen that your financial health has improved in the meantime and you want to anticipate the repayment. In this case, the lender may ask you for a repayment indemnity of 1% on the amount repaid when the duration of the credit is greater than or equal to one year. If the duration of the immediate credit is less than one year, the compensation is capped at 0.05%. In all cases, the amount requested cannot be greater than the cost of the credit that remains to be repaid.
How much can immediate credit cost?
The cost of immediate credit depends mainly on the interest rate of the loan or APR. The latter is calculated based on:
- the base interest rate charged by the credit institution
- administrative fees
- the cost of insurance when it is compulsory
This rate can vary from one lender to another. Therefore, it is advisable to check competing offers before choosing. The total cost of immediate credit is made up of the sum of the interest paid throughout the credit in addition to the loan capital.
The other factor that influences the cost of immediate credit is the length of the loan. For example, the same amount payable in one year will have a higher monthly payment than if it is payable over two years. In return, the APR remains the same, which ultimately increases the amount of interest payable over two years compared to one year.
Extending the duration of an immediate loan may be suitable for you in the event of temporary financial difficulty, but it leads to the overall increase in the cost of credit. However, with immediate personal loans, the monthly payments as well as the repayment period are known in advance since the rates are fixed.
In addition, there is a usury rate set by the Bank of United States which imposes a limit on the APR set by credit institutions. The purpose of this system, like that of the legal customer information system, is to prevent excessive debt. Lending has real consequences on your finances. To choose an immediate loan offer, you must perform an online simulation.
Simulate an immediate loan before committing
Simulating immediate credit is essential for a successful loan project. Even if the urgency of the broken down car is urgent, take the time to compare before deciding. An offer that seems tempting a priori can involve a risk on your budget. To compare, you have to simulate the lender's APR, your debt ratio and your purchasing or borrowing capacity depending on the type of loan.
The online APR simulator gives you the true cost of credit, the debt ratio simulator tells you about your current debt level and the borrowing capacity simulator gives you an idea of how much you can lend while remaining solvent. The information requested is the desired credit amount and duration as well as information on your income and expenses.
Instant credit is a fast consumer loan that is very well suited to unforeseen circumstances. It is a recourse when you do not immediately have the necessary funds for an expense. But like any credit, it is important to evaluate it before contracting it, especially when the amount involved is large.