Nick BendelNick BendelJun 26, 2018(1 min read)

Instant approval loans are payday loans that have a very short assessment process. Please note that the name is a bit misleading, because no assessment can ever be instantaneous and approval can never be guaranteed.

Taking out an instant approval loan involves a four-step process:

  1. You fill in the payday loan application
  2. Your application is assessed
  3. Your application is approved
  4. The lender transfers the funds to your bank account

With some payday lenders, the process is so quick that it may be completed within an hour. However, even if the payment is made that quickly, it might then take two business days for the money to arrive in your bank account.

Related FAQ's

Can anyone get instant approval loans?

No. Lenders will only give you an instant approval loan if they believe you have the capacity to repay the loan.

Different lenders have different assessment criteria, but you’ll generally have to meet certain benchmarks regarding your income, spending, employment and identity.

Your application for an instant approval loan might be rejected if:

  • You have a bad credit history
  • You don’t earn enough money
  • You spend too much money
  • Your employment status is not secure
  • You’re not an Australian citizen or resident
  • You’re not at least 18

Do I need security for instant approval loans?

As a general rule, you don’t need to provide security to get an instant approval loan. However, in return for giving you a quick loan and not asking for any collateral, the lender will almost certainly charge you high fees.

With instant approval loans, the lender can charge an establishment fee of up to 20 per cent (which would be $300 on a $1,500 loan) and a monthly fee of up to 4 per cent ($60 on a $1,500 loan).

Should I take out a $1,000 payday loan?

As a general rule, you should think very carefully before you take out a $1,000 payday loan – and proceed only if you’ve explored all other options. That’s because payday loans generally have very high fees.

Before you take out a $1,000 payday loan, you might want to call the National Debt Hotline or investigate the No Interest Loan Scheme.

What's the interest on a $1,000 payday loan?

Payday lenders aren’t allowed to charge interest on $1,000 payday loans (or any other payday loans). However, they are allowed to charge high fees, which may include:

  • An establishment fee of up to 20 per cent (or $200)
  • Monthly fees of up to 4 per cent (or $40)

Depending on the length of your loan, here is the maximum amount you would have to repay with a $1,000 payday loan:

  • 1 month = $1,240
  • 2 months = $1,280
  • 3 months = $1,320
  • 4 months = $1,360
  • 5 months = $1,400
  • 6 months = $1,440
  • 7 months = $1,480
  • 8 months = $1,520
  • 9 months = $1,560
  • 10 months = $1,600
  • 11 months = $1,640
  • 12 months = $1,680

How do you get a $1,200 payday loan?

Most payday lenders take applications for $1,200 payday loans over the internet, although some lenders also allow you to apply in-store.

The application process varies from lender to lender, but you will probably have to provide your:

  • Name
  • Address
  • Income
  • Employment details
  • Driver’s licence number

How much does a $1,200 payday loan cost?

With $1,200 payday loans, you can be charged an application fee of up to 20 per cent (or $240) and a monthly account-keeping fee of up to 4 per cent ($48) – although you can’t be charged interest.

If the lender charges a monthly fee, the longer your loan term, the more you’ll have to pay. Here’s how the fees can add up:

  • 1 month = $48
  • 2 months = $96
  • 3 months = $144
  • 4 months = $192
  • 5 months = $240
  • 6 months = $288
  • 7 months = $336
  • 8 months = $384
  • 9 months = $432
  • 10 months = $480
  • 11 months = $528
  • 12 months = $576

Should I take out a payday loan?

As a general rule, you should take out a payday loan only if there are no other options. That’s because payday loans are usually very expensive.

Payday lenders can’t charge interest – they can only charge fees. But the fees can be steep, so your borrowing costs might be equivalent to paying an interest rate of more than 500 per cent.