Personal Loan: A Beginner’s Guide to Getting an Instant Loan

A personal loan is an unsecured loan given to meet the immediate financial needs of individuals. Lately it is quite common for banks to offer instant loans in this category. These instant loans are provided to meet urgent financial assistance. There could be several reasons why you apply for an instant personal loan. This could include a wedding, a vacation, the purchase of a luxury item, and a personal emergency.

A. Wedding: There is a wedding in the family and you are short on some money. So, you plan to cover the deficit get a personal loan.

B. To go on vacation: You plan to go on vacation and you are short of money. Getting an instant loan is an easy and convenient way to meet your financial needs.

C. To buy a luxury: You are thinking about purchasing a luxury item and are currently short on funds. So, the only way to purchase the luxury item is through a personal loan.

D. Personal emergency: You are facing a personal emergency and are currently short of funds. An instant loan can come in handy in this case.

They are unsecured loans and have the following five characteristics:

1. Less documentation: The bank gives an instant loan when you share a long relationship with the bank and by virtue of this relationship, they have all the necessary documents to approve a loan, for example, proof of income, proof of employment and credit score. .

2. Quick approvals: By definition of instant loans, these loans receive instant approvals. So, the moment the form is submitted, the money is transferred to the bank account.

3. High interest rates: Personal loans usually have high interest rates. Typically, all unsecured loans carry a higher interest rate. Loans that are secured, meaning they need collateral, have a lower interest rate.

4. Tenure: The duration of the loan is usually small. Unlike a car or home loan, the duration of an instant loan is short: sometimes as little as a few months and as long as 2 or 3 years. These loans are known for the convenience they offer. Basically, they are intended to meet the short-term needs of consumers, for example, to go on vacation or to deal with a financial emergency.

5. Flexible loan amounts: The loan amount is quite flexible. This means that the loan can be given as a line of credit and the loan can be used when the need arises. And interest is applied only on the amount borrowed, that is, the part of the line of credit that is exhausted.

6. Online process: The loan application process is completely online. This means that the applicant has to submit the form online and the loan amount is disbursed instantly.

Eligibility Criteria:

For instant loans, the eligibility criteria varies from person to person. but typically the criteria include:

1. Age criteria: The age criterion should be between 21 and 60 years i.e. the applicant should be in the age group of a working professional.

2. Monthly income: Monthly income should be around $25,000 per month.

3. Credit score: The applicant must have a good credit score. An instant loan is given to applicants with a high credit score i.e. 720 or above.

Required documents

As mentioned above, the instant loan does not require the presentation of any physical document. TO personal loan It generally requires the applicant to submit three months’ worth of salary slips, an employer-provided ID card, PAN, aadhaar and form 26AS for the last two years. However, the instant loan does not require the presentation of any of these documents.

In short, an instant loan is a subcategory of personal loan, which is an unsecured loan provided by banks or financial institutions to consumers to meet a variety of financial needs, such as a medical emergency, purchasing a luxury item, going on vacation. and housing renovation, among others.