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What are instant approval personal loans?

Instant approval loans are designed for individuals who need access to extra money fast, whether to cover the costs of an unexpected bill or to fund a last-minute expense. This funding isn't meant to be a long-term financial solution but rather to provide support in the event of a financial emergency, where you don’t have the time to gather the funds for an unforeseen invoice.

Lenders tend to offer instant cash loans online, with the funds generally entering your bank account within hours or the next day. It’s worth keeping in mind that quick cash loans typically incur higher interest rates and fees, due to the increased lender risk. If you’re on the hunt for instant loan approval, make sure to compare your options to ensure you’re getting a good deal that suits your needs and that you can comfortably pay back as per the payment plan.

Who offers instant approval loans in Australia?

Instant approval loans, if you need a loan today, are offered by a range of traditional lenders including banks and credit unions, as well as non-traditional online lenders and peer-to-peer lenders. 

That said, not every lender in Australia offers instant cash loans.

How much can I borrow with an instant approval loan?

The minimum and maximum amount you can borrow with an instant approval loan will differ from one lender to the next. Generally speaking, it can range from $500 to $2000, but some lenders will lend smaller amounts and some will offer larger.

If you're looking for a larger sum than what's available for an instant approval loan, and you've got some time up your sleeve, you might like to consider a standard personal loan.

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How do you compare instant approval loans?

When weighing up your instant loan options, there are several factors to consider to ensure you get an appropriate deal that suits your financial situation. These include:

  • Loan amount: The maximum loan amount for instant loans is typically $2000 but they can extend as high as $5000 or $10,000.
  • Loan term: Fast cash loans generally have short terms, spanning from 16 weeks to 24 months; remember, while longer loan terms lower your repayments, the amount you spend on interest charges and monthly fees can add up and increase the overall amount you'll pay.
  • Fees: The majority of instant approval loans have an upfront establishment fee, which may vary depending on how much you borrow. Other fees include ongoing and early repayment fees, which may come into effect if you want to pay off your loan before the loan term ends.
  • Features: Some lenders offer flexible repayments that you may use to coordinate your loan repayments with your pay day, whether weekly, fortnightly or monthly.
  • Secured vs unsecured: Instant personal loans are usually unsecured, meaning they don’t require any collateral to be attached to the loan to mitigate risk for the lender. Secured loans are more common for traditional personal loans or car loans with a larger lump sum.
  • Fixed interest rate vs variable interest rate: When it comes to instant approval loans, fixed interest rates are most common. A loan's comparison rate should give you a better idea of the total loan amount as it will include both the interest rate and the main fees payable. RateCity’s personal loan calculator may also assist you with your calculations.

How do you get instant approval for a cash loan?

If you’re accepted for an instant cash loan, you can usually expect to receive the funds in your bank account within a matter of hours (if you applied within business hours), or the next day. 

To be eligible for instant cash loans you typically need to be:

  • over 18 years of age
  • an Australian citizen or permanent resident
  • able to provide proof of regular income (note, many lenders have a minimum income requirement).   

Will you need pre-approval for an instant loan?

Pre-approval is a conditional form of approval based on how well you meet a lender's basic eligibility criteria, to give you an indication of how likely a lender is to formally approve your personal loan (note, pre-approval does not guarantee approval of the loan you’re after).

Typically, pre-approvals are not necessary for instant cash loans.

Do you need a good credit score for an instant loan?

Eligibility criteria differs from lender to lender, so this depends entirely on the lender you're considering doing business with. Some lenders will only lend instant cash loans if you have a good credit score, while others may not require a credit check at all, and instead assess other factors such as your income.

It's part of a credit provider’s job as a responsible lender to ensure that any loan product they approve will not put the borrower at harm of financial instability or risk. Similarly, borrowers should always exercise caution when making loan applications and be sure they’re not taking on debt they can’t afford to repay.

Before doing business with any lender, it’s a good idea to check their authenticity; you can do this by ensuring they hold a valid Australian credit licence; are fully transparent about their loan rates, fees, and conditions; and read reviews from previous borrowers.

What is a payday loan?

An instant payday loan is another term for an instant approval loan.

As with any financial product, there are pros and cons involved that are worth weighing up before you invest. Below are some of the benefits and risks that come with instant payday loans.

Benefits of instant payday loans:

  • speedy turnaround time, giving you quick access to extra funds when you need them.
  • usually a hassle-free application process involving filling in an online application form.
  • may offer lower interest rates than some credit cards.
  • having a bad credit score or no credit history may not disqualify you from applying for these financial products.

Risks of instant payday loans:

  • tend to have higher fees than other loans and credit products, due to the increased lender risk.
  • usually offer small loans capped at $2000, which may not be suitable for all borrowers in covering the costs of an unexpected expense.
  • often restricted to short-term loans.
  • May not be a sustainable financial solution; remember, you can always talk to a financial adviser or reach out to the National Debt Helpline if you are experiencing financial hardship. 

Can I get an easy/instant personal loan?

Some lenders are able to approve applications with little documentation and within minutes. However, there is a catch. People who take out easy/instant loans generally pay higher interest rates and are restricted to lower amounts than people who follow a traditional borrowing process.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Can I get a fast loan with bad credit?

Some lenders offer fast loans to borrowers with bad credit. Providers of small payday loans of up to $2000 or medium amount loans of up to $5000 may have no credit checks, though these lenders will usually want to confirm you can afford its loans on your income.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.