An instant loan, in simple terms, is the money you borrow from a lender, which you can use in any way you want, without any restrictions. You can use the money from your instant personal loan for renovating your house, aiding your business, buying a car, and even financing an international vacation. And after that, you can slowly repay the borrowed money through easy monthly installments. In this brief guide, you will learn everything you need to know to secure an instant personal loan online. Let’s dig in.
The Best Times to Take an Instant Personal Loan
No loan scheme should be treated lightly, including personal loans.
- Many lenders usually disburse online personal loans within the span of 24 hours. This makes it one of the best aids to get you out of an immediate financial crisis.
- You only need to borrow money for a short time.
- Instant cash loans don’t require you to put down collateral. So, if you don’t have any property to pledge as collateral, this type of loan is your best option.
- Do you have a steady source of income but a poor credit score? No worries. Securing a personal loan and paying it within the agreed tenure is one of the best ways to increase your credit score. This way, it will be easier for you to borrow a large sum of money in the future if the need ever arises — for example, a housing loan.
Benefits of an Online Personal Loan
Like every other loan scheme, an online personal loan also comes with its own advantages. Here’s a list of benefits of securing an instant personal loan:
- As unsecured personal loans require no collateral, you can get your desired funds pretty quickly.
- Personal loans are one of the most convenient ways to borrow money for a holiday trip or a vacation. You can use the fund to cover your flight and accommodation expenses. Since you are only borrowing the money you need, you can easily repay it after a short time.
- Are you a self-employed worker, and your business requires a few lakhs of rupees immediately? In this case, getting an instant cash loan might be the best option.
- Most online personal loans can be secured within 24 hours as long as you have a credit score. All you need is your income proof, the KYC documents, and of course, a high enough credit score.
- Depending on the lender, you can borrow any amount of sum starting from Rs. 5,000 to Rs. 25 lakhs.
Factors That Affect the Interest Rate of a Personal Loan
There are many factors that affect the interest rate of a personal loan. You can get a personal loan with an interest rate as low as 9.9% per year. Meanwhile, if you have a poor credit score, the interest rate can instantly shoot up to 45% per annum. Learn about the list of factors that affects your personal loan interest rate:
- Income: People with higher incomes have more excellent loan repayment capability. So, if your average monthly earnings are high and it comes from a steady source of income, you will get an online personal loan at a low-interest rate.
- Credit Score: If an individual has a high credit score, it means he/she uses the borrowed money responsibly and repays the borrowed money on time. That’s why if you have a credit score of 750 or more, you can get an instant cash loan at a low-interest rate.
- Employer’s Status: An employee of a large organization has better job security and a higher salary. Depending on your employer’s status, the lender may decide to either increase or decrease the interest rate of the personal loan.
- Other Factors: Apart from the three main factors mentioned above, your debt-to-income ratio, your relationship with your potential lender, and your history of default can also significantly affect the interest rate of the cash loan.
Applying for an Instant Personal Loan Online – A Brief Explanation
Nowadays, many reputable lenders are offering their services online. So, you can apply for an instant personal loan just with a few clicks without leaving the comfort of your home. Here’s is a brief explanation of the procedures you need to follow to apply for an online instant loan:
- Check Your Eligibility Criteria: To get an instant loan, you must fulfill some essential eligibility criteria. Apart from the special requirements of the lender, you must fulfill these criteria:
- You’re at least 21 years old.
- You’re an Indian citizen.
- You have the necessary documents to apply for the loan.
- Check Interest Rates and Charges: In the next step, you must check the interest rates of different cash loan schemes and other additional charges of availing them.
- Calculating the EMI: Once you figure out how much money you need to borrow and the expected interest rate, you can calculate the approximate EMI using the EMI calculator.
- Fill out the Application and Submit the Documents: In this step, you need to open the online personal loan application form and fill it out. Next, you have to follow the on-screen instructions, scan and attach the necessary documents, and finally submit the loan application.
- Wait for the Approval: Now, the lender will evaluate your application and get back to you within a few hours. If you have filled out the application correctly, the loan will be approved within the next 24 hours.
In short, if you need to quickly borrow some money and want a stable way to repay the borrowed sum through EMI over a set period of time, getting a personal loan is a good choice. To get an instant loan with a low-interest rate at any time, make sure you maintain a good credit score and keep your other debts as low as possible. Compare the personal loan schemes from different online lenders, understand their terms, and weigh the factors mentioned in this guide correctly, to get the best loan deal possible.
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