Whenever you face a money crunch, applying for instant loans is a sure-shot way of getting funding instantly. They can quickly provide emergency funds in unforeseen circumstances. Moreover, applying for these instant loans has become extremely easy. Available at any bank or NBFC institute, you can apply online from the comfort of your couch.
However, the key to instant loans is to borrow from the lender with the lowest interest rate so that you can repay with minimum interest and your EMIs are also low. If you want instant loans but want to know everything about it first, this article is the perfect guide for you. We will discuss everything you need to know about instant loans before you apply for one.
What are Instant Loans?
Instant loans are short-term loans designed to provide immediate cash to borrowers. These loans are typically meant to cover unexpected expenses or financial emergencies that may arise before the borrower’s next payday.
The defining feature of instant loans is the speed at which they are processed and approved. Traditional bank loans usually involve a lengthy application and approval process, whereas instant loans can be obtained quickly, often within a few hours or even minutes. This quick turnaround time is achieved by leveraging digital technology and streamlined application processes.
Borrowers seeking instant loans typically provide basic personal and financial information, proof of income, employment, and a valid bank account. Lenders use this information to assess the borrower’s creditworthiness and determine the loan amount that can be offered. Credit checks are often minimal or not performed at all, making these loans more accessible to individuals with limited or poor credit histories.
However, instant loans come with higher interest rates and fees than traditional loans, mainly due to their short-term nature and the perceived higher risk for the lender. As a result, borrowers should exercise caution and consider the total cost of borrowing before taking out an instant loan. They are meant to be repaid quickly, usually within a few weeks, meaning borrowers must plan for timely repayment to avoid additional charges or penalties.
What are the Benefits of Instant Loans
Instant loans come with several benefits for the borrower, Some of these benefits include:
- Speed and Convenience: As the name suggests, one of the most significant benefits of instant loans is the speed at which they can be approved and disbursed. Borrowers can complete the application process online or through mobile apps, and funds are often deposited into their bank accounts within a short period, usually within a few hours or even minutes.
- Accessibility: Instant loans are designed to be more accessible than traditional bank loans. They are available to individuals with various credit histories, including those with limited credit scores, who may have difficulty obtaining loans from conventional lenders.
- No Collateral Required: Most instant loans are unsecured, meaning borrowers do not need to provide collateral to secure the loan. This reduces the risk for borrowers who may not have valuable assets to provide as collateral.
- Flexibility in Loan Use: Unlike some other types of loans that may have restrictions on how the funds can be used, instant loans typically offer flexibility in how borrowers can utilise the money. Borrowers can use the funds for their personal purposes, including medical expenses, car repairs, utility bills, or any other urgent financial need.
- Short-Term Commitment: Instant loans are short-term loans, usually due on the borrower’s next payday or within a few weeks. This means borrowers are not tied to a long-term financial commitment, which can be beneficial for those who need temporary assistance to bridge a financial gap.
- Hassle-Free: Instant loans usually require minimal documentation, making the application process hassle-free and less time-consuming. Borrowers typically need to provide basic personal and financial information, proof of income, and a valid bank account.
- Building or Repairing Credit: For individuals with poor or limited credit history, responsibly repaying an instant loan can help improve their credit score. Timely loan repayment demonstrates reliability and can contribute to a positive credit history, potentially increasing the borrower’s creditworthiness over time.
What are the Requirements for Instant Loans?
Instant loans are easy to acquire, and their prerequisites are not lengthy. Here is a list of the requirements you need to have to acquire instant loans.
- Nationality: In order to be eligible for an instant loan, the first criterion in almost every bank and lender is the matter of your nationality. You must be an Indian National in order to avail instant loan.
- Employment Status: The next requirement is your employment status. In order to be eligible for an instant loan, you need to present proof of employment. Moreover, you are required to have a minimum level of income in order to be eligible for these loans.
- Bank Account: Borrowers are typically required to have an active bank account. This is where the loan funds will be deposited, and it also allows the lender to set up automatic repayments.
- Credit Check: While some instant loan providers require a satisfactory credit score before approving a loan, some lenders like Kreditbee are much more flexible in this aspect. They lend money even with limited credit history.
Conclusion
Instant loans are a great way to help you in a financial stretch. You can use these to finance any emergency on top of your regular expenditures. However, it is advised to only avail of these loans when absolutely necessary since they can add to your financial burden.
Before you apply for instant loans, ask yourself if you have the ability to repay on time. Remember to borrow wisely and reach out to reputable providers.
