Gone are the days when you had to visit a money lender’s office to get a loan at a high-interest rate or even pledge your jewelry to get instant access to funds. With banks and NBFCs offering instant loans, you can get money in your bank account in just a few minutes. Availing an instant loan in India has now become possible due to the advent of technology that has propelled the loan buying process in India. Read on to know all about getting an instant loan in India.
What is an instant loan?
Traditional loan buying process included visiting the bank, filling the loan application form, submitting the required documents and waiting for days to get loan approval and months for disbursal. However, now, since lenders in India have gone digital, the loan can be availed instantly without having to wait for a single day even. An instant loan is an unsecured loan that can be availed without having to keep any collateral or guarantor. The loan application can be made online through the lender’s app or website. Getting an instant loan is easy in India as you don't have to follow any lengthy documentation process and simply have to submit your KYC documents along with bank statements and salary slips.
Why instant loan is popular among youngsters?
Availing an instant loan can help you tide over financial difficulties almost instantly. Furthermore, this type of loan also offers you a few other benefits that have made it a popular choice amongst today's youngsters.
No collateral: One of the primary benefits of getting an instant loan is that you don’t have to keep any collateral. Since this is an unsecured loan, the loan amount is sanctioned purely based on your credit eligibility that is dependent on your credit score, income, employment type, age, and other factors. Thus, this type of loan saves your time from arranging the collateral and also ensures your assets are safe.
Minimum documentation: To avail this type of loan, you don’t have to submit too many documents except for basic KYC and bank statement. The documents required for an instant loan are similar to documents required for personal loan. You will have to submit any one identity proof, address proof, salary slip, and bank statement.
Instant approval and disbursal: Contrary to traditional bankers, online lenders now offer you instant approval and disbursal. This has become possible as online lenders operate using certain data points and algorithms that help them determine your credit eligibility. This process is simple and fast and thus enables the lenders to offer you quick approval and disbursal.
Affordable interest rates: It is a common misconception that since this type of loan is available instantly, online lenders charge a high-interest rate. However, in reality, the interest rate is nominal and is charged based on the loan tenure and eligibility criteria.
Multipurpose loan: No matter what the occasion is, you can utilize the loan amount as per your financial requirement. Be it funding your wedding expenses, paying educational fees or even taking care of medical expenses, this type of loan can be availed to address any type of financial emergency.
Flexible tenure: Instant loan up to Rs. 40 lakhs is offered for flexible loan tenure of 12 months-60 months. This means that you can opt to control your EMI outflow from your monthly income by opting for a longer tenure.
Helps you build a good credit score: Just like any other type of loan, an instant loan too has an impact on your credit score. If you repay the loan on time without missing out on the EMI payments, then you can build a good credit score that will further help you secure more loans in the future.
Easy repayment options: Earlier loan repayment was done through cheques, but today, one can easily repay the instant loans online. Fintech companies and online lenders offer you the option to repay the loan online through their website or payment apps such as Paytm, Google Pay and others. Additionally, you can also repay the EMI through the NACH mandate that allows for the auto-debit of the EMIs.
Attractive interest rates: Depending on your monthly income and eligibility criteria, you can avail instant loan of Rs. 20,000-Rs. 2,00,0000. Online lenders generally offer interest rate ranging from 10%-20% that is similar to rates offered by banks in India. The interest rate offered to you by various lenders may vary depending on your income, job type, company, existing liabilities, credit score and other factors.
Today's youth is technologically enabled and online availability of such loans has further increased the popularity of this loan product. An instant loan thus helps in providing the required financial support without having to follow any stringent loan application process.