What Are Instant Loans? How to Get One

Instant loans are small personal loans that you can get fast – and sometimes nearly instantly.

Lender decisions are often not based on your creditworthiness (or at least, not entirely); instead, online instant loans are usually available to members of a specific financial institution or credit union, with no credit check to qualify.¹ Other factors, like account activity and balances, can help with lender decisions.

Instant loans are short-term loans (usually repaid within one to three months²) and may have higher annual percentage rates (APRs) than some other types of loans. Instant loans can help in scenarios when you need money fast, like:

• You were expecting a tax refund but wind up owing Uncle Sam when you file your taxes.
• You get into a fender bender and need cash to cover the insurance deductible.
• You can’t afford an emergency vet bill after your dog ate something questionable in the garbage.

Chime tip: There are other types of fast-funded loans, like car title loans and payday loans. These loans can be viewed as predatory, according to the Consumer Financial Protection Bureau.³ Instant loans can be a safer and more affordable alternative.

An instant loan from a financial technology company is typically only available to its members. You can launch your mobile banking app, log in online, or, if applicable, visit a local branch of your bank or credit union to get started.

If approved, your bank account will usually be funded quickly with the amount you borrowed. Most lenders promise near-instant funding, but they may have terms and conditions that outline potential delays in funding.⁴

Once you receive your instant loan you’ll then make payments, often biweekly or monthly, over the duration of the loan repayment term. By the end, you’ll have paid back what you borrowed, plus any fees and interest.

Instant cash loans can be a huge help if you’re in a financial pinch and just need a little extra cash to get you through to next month.

But there are some potential drawbacks to consider.

Benefits of instant loans

• Fast cash: It’s in the name – instant loans offer fast approval and fast funding. That way, you can get the cash you need when you need it.
• Easy approval: You can get instant loans even if you have bad credit from financial tech companies (fintechs) like Chime without a credit check. These institutions can offer instant loan approval by using other data sources that inform their lending decisions, meaning you could potentially qualify for a loan with bad credit or no credit at all.
• Credit score boost: If the instant loan lender reports your on-time payments to the credit bureaus, you might see a boost to your credit score over time. For example, members who repay their Instant Loans through Chime could see a credit score boost of 10 to 30 points.⁵
• Better alternative: Instant loans are often a safer alternative to payday loans, whose interest rate equivalents can nearly reach 400%.3 Some instant loans may even have an APR comparable to credit cards.⁶

Disadvantages of instant loans

• High APR: Instant loans are fast and easy to qualify for, but there’s a price to pay for the convenience. These loans often have APRs much higher than personal loans, though they are nowhere near as high as payday loans. Some may even have rates closer to credit cards.
• Small loan amounts: Instant cash loan amounts are small – $500 is often the max amount you can borrow.¹ If you need more money, you’ll need to consider an alternative, such as a personal loan, a credit card with a higher credit limit, or a loan from a friend or family member.
• Cycle of debt: Instant loans are helpful fixes, but if you aren’t careful, they could become a bad habit. There is potential for you to borrow money because you can’t afford a bill and then have to pay back what you borrowed so you’re in the same boat, with the same bill, next month.

Instant loans are available from several different lenders in several different formats:

• Small instant loans: You can get loans under $500 if you’re a member of a certain fintech. For instance, Chime members may be eligible for Chime Instant Loans up to $500.
• Banks and credit unions: Local banks and credit unions may also offer quick financing options.
• Cash advance apps and credit cards: Certain apps and credit cards allow you to take out a cash advance. Cash advance apps are often tied to your paycheck while credit card cash advances are linked to your available credit
• Online personal loan lenders: Some online lenders may be willing to issue small loan amounts (such as $1,000), even to borrowers with bad credit. These loans are often secured by your house or your car. While some personal loans offer same-day funding, they’re generally not “instant,” like some of these other options.

The application process for an instant loan will vary by lender, but in general, here’s what you’ll need to do:

• Figure out how much money you need: Most lenders with instant loans only let you borrow a small amount. If you need a larger loan ($1,000 or more), look into personal loans instead – but note that eligibility requirements may be stricter, and getting the loan funded could take a few days.
• Check your eligibility: Not every member of a financial institution may be eligible for the instant loan product. Determine if you’re eligible before applying.
• Submit an application: You can sometimes do this directly in a mobile app. Instant loans typically offer instant approval, without a credit check, and the money should be deposited into your account the same day.
• Repay the loan: You won’t have long to repay your instant loan, usually a few weeks to a few months. Stay on top of payments, including any fees and interest. Lenders may report your on-time payments to the credit bureaus, which can boost your credit score.

Instant loans come in many forms – cash advances, payday loans, car title loans, and even small personal loans that are funded and repaid quickly. That last option is a much safer alternative to traditional payday loans and can help you out in a pinch.

Trying to break the cycle of borrowing? Here are some ways to work from home and get paid instantly – even on the same day.