An instant bank loan is the last resort for many people. You urgently need quick money, be it to replace an old loan, to have your car repaired, to replace a suddenly defective household item or to support a family member who is in need. But what exactly is an instant loan from a bank and what should you watch out for?
Bank instant credit: explanation
Offers for an instant loan are easy to find at a bank. Every financial institution carries out such offers. The difference between an instant loan and a conventional loan is the time of payment. As the name suggests, the instant loan is paid out by the bank shortly after the application is made, whereas a conventional loan only takes a certain amount of time. Instant loans are also usually more expensive.
This is due to the increased risk that an instant loan means for the bank. While with a traditional loan, the lender carries out a detailed check of the loan application in order to check the creditworthiness of the applicant and in this way to be able to provide him with the ideal offer for his needs, many of these check steps for an instant loan are omitted due to the tight time window.
Do instant loans always have to be more expensive?
However, there is no longer the automatic mechanism that an instant loan from a bank always grants higher interest rates than a traditional loan. This is due on the one hand to the liberalization of the financial market by the EU and on the other hand to the technical achievements of the Internet.
Because both developments have ensured that more and more financial institutions have been able to penetrate the German market and competition has thus become much tougher. Fierce competition is of particular benefit to the customer. Banks have to create cheaper and cheaper offers in order to remain attractive to people. The Internet provides security for borrowers in two ways.
Because the network is the largest information gathering point there is. There, customers can compare offers via instant loans with offers from other banks and thus assess which offers are good and which are bad. In addition, customers benefit from the numerous reports from other Internet users. In this way, they can collect more and more information and thus come to the offer of a bank instant loan that best suits their individual requirements.