Financial emergencies are always uncalled for! Not always you can borrow from friends or family. At such times, instant personal loan can act as a saviour. Nowadays, these loans are becoming very popular due to their ease of access. Either you are facing a fiscal exigency or just need some extra bucks for your new device, these loans fulfil your requirement. However, you need to be cautious while taking an instant personal loan. Here, in this article, we will discuss about all aspects of instant personal loan, so that you can take a well-informed decision.
First, What is an Instant Personal Loan?
Instant personal loans are short-term unsecured loans that can be availed online without the rigmarole of physical paperwork. They are meant to provide quick and easy access to funds for various personal needs such as medical emergencies, home renovation, travel, education, wedding, etc. Instant personal loans are also known as online personal loans, digital loans, or app-based loans.
What are the required documents for instant personal loan?
To apply for an instant personal loan, you need to provide some basic documents such as:
- PAN card
- Aadhaar card
- Bank statements for the last 3 months
- Salary slips for the last 2 months (if salaried)
- Income tax returns or audited financial statements (if self-employed)
- Some lenders may also ask for additional documents such as address proof, photo ID proof, post-dated cheques, etc. Depending on their eligibility criteria and verification process.
Advantages and Disadvantages of instant personal loan:
Instant personal loans in India have some benefits and drawbacks that you should be aware of before applying for them. Here are some of them:
- Instant personal loans can help you meet your urgent financial needs without any delay or hassle.
- These loans do not require any collateral or security, which means you do not have to risk any of your assets or valuables.
- Such loans can be used for any purpose, such as medical bills, education fees, home improvement, travel, wedding, etc. Without any restriction or interference from the lender.
- They can help you improve your credit score if you repay them on time and in full. This can enhance your creditworthiness and eligibility for future loans.
- Instant personal loans have high interest rates and charges, which can increase the cost of borrowing and affect your monthly budget.
- They have short repayment tenure and strict penalties, which can put pressure on your cash flow and savings. If you miss or delay any payment, you may have to pay hefty fines and fees, which can also damage your credit score.
- These loans have low loan amount and eligibility, which means you may not be able to get the desired amount or qualify for the loan if you have a low income or a poor credit history.
- Instant personal loans can affect your credit score if you default on them or take multiple loans from different lenders. This can reduce your chances of getting approved for other loans or credit cards in the future.
What you should take care of?
Before applying for an instant personal loan, you should take care of the following aspects:
Check your eligibility: Different lenders have different eligibility criteria for instant personal loans. You should check if you meet the minimum age, income, credit score, and other requirements before applying.
Compare interest rates and charges: Instant personal loans come with high interest rates and charges such as processing fee, prepayment fee, late payment fee, etc. You should compare the rates and charges offered by different lenders and choose the one that suits your budget and repayment capacity.
Read the terms and conditions: You should read the terms and conditions of the loan agreement carefully before signing it. You should understand the repayment schedule, penalties, foreclosure options, customer service, etc. Of the lender and agree to them only if you are comfortable with them.
Borrow only what you need: You should borrow only what you need and not more than that. Borrowing more than your requirement can lead to unnecessary debt and interest burden. You should also avoid taking multiple instant personal loans from different lenders as it can affect your credit score and repayment ability.
Check the lender’s credibility: This is the most important aspect that you should take care of while availing an unsecured instant loan. There are many dubious apps which are not complying RBI guidelines and offering loans even at a poor credit score. However, they charge exorbitant interest rates and often resort to blackmailing and name shaming to recover money. So, it is very important to check the background and reviews of the platform from which you are takin loan.
5 best platforms to get instant personal loans in India
There are many platforms that offer instant personal loans in India. However, some of the best ones are:
MoneyTap: MoneyTap is one of the popular instant loan apps currently available in India. You can take a loan ranging from ₹3,000 to ₹5 lakhs with interest rates starting from 13% p.a. You can also get a credit line or overdraft facility with MoneyTap that allows you to withdraw money as per your need and pay interest only on the amount used.
KreditBee: KreditBee is another app-based lender that targets young professionals with a stable monthly salary and needs quick cash without any collateral. You can get a loan from ₹1,000 to ₹2 lakhs with interest rates ranging from 14% to 29% p.a. The loan tenure can be from 2 months to 15 months.
MoneyView: MoneyView offers instant personal loans to customers from anywhere in India. The loans can be applied easily as the process is entirely paperless. The MoneyView Loans app enables people with low credit scores get loans, as the credit model it follows is different from the traditional methods.
PaySense: PaySense is an online platform that provides instant personal loans to salaried and self-employed individuals. You can borrow from ₹5,000 to ₹5 lakhs with interest rates starting from 16% p.a. The loan tenure can be from 3 months to 60 months.
CASHe: CASHe is a fintech company that offers instant personal loans based on your social profile, merit, and earning potential. You can get a loan from ₹10,000 to ₹3 lakhs with interest rates starting from 18% p.a. The loan tenure can be from 15 days to 180 days.