At times situations may arise where you may need urgent funds. The fund necessity can be for a dream vacation, personal purchase, or home renovation, or it can be that you are facing a medical emergency or you have lost your job. In cases like this, you can apply for an instant personal loan to keep you afloat through difficult times. Instant loans are becoming increasingly popular because of their speedy application and processing times. You can get a loan amount ranging from INR. 5,000 to INR 5 lakh.
What Is Instant Personal Loan?
Instant loans are unsecured loans wherein there is not much paperwork or documents required. The loan is quickly approved without requiring you to give collateral or pledge an asset. Compared to standard bank loans, the loan procedure is simple and convenient. Nowadays, getting a loan for an emergency is easy since you can apply for an instant loan without much effort; instant loans can be availed online without going to a bank or filling out a long form.
Benefits Of An Instant Personal Loan
Apart from the advantages that instant personal loans do not require collateral and are processed and disbursed instantly, there are other benefits of instant loans.
Paperless: When applying for an instant loan, all appropriate documents must be uploaded online, making the process paperless. Additionally, if you get a pre-approved instant loan, you must submit minimal or nil documents.
Customizable: You are typically given a customizable loan term when you apply for an instant personal loan. Moreover, you can set the repayment period that suits your needs as long as the tenure is within the maximum loan payback duration specified by the lender.
A reasonable interest rate: A good credit score is essential for an instant personal loan with an affordable interest rate. The threshold for the credit score is 750 or more to be eligible for an instant loan.
GST On Personal Loans
Earlier, personal loans were subject to a 15% service tax. Now service tax has been replaced, and GST is applicable on personal loans, which is 18%. GST is not applied to loan interest payments or loan repayment. Instead, it is charged on processing fees, prepayment fees, and other fees associated with personal loans paid to the bank or lender. The impact of GST on a personal loan is minimal because the majority of loan repayment is made up of interest and principal payments.
Personal loan GST rate depends on the processing and prepayment fees. Therefore, getting a loan with a lower prepayment or processing fee is the best way to reduce your GST. It will be beneficial to compare different loan offerings. To establish a balance between all the fees and costs associated with a personal loan, it is also wise to pay attention to the rate of interest applied to the loan.
- A high credit score is essential for an instant personal loan with a reasonable interest rate. Hence, ensure that your credit score is always 750 or more.
- To qualify for an instant personal loan, prospective borrowers must be at least the lender’s stipulated age limit. The age restriction differs depending on the nature of your occupation- whether you are a self-employed individual or a salaried employee. Check the age restrictions of banks and financial companies that provide instant personal loans.
- Most lenders provide instant personal loans to self-employed and salaried employees.
Documents Required For Instant Personal Loan
The paperwork needed to apply for an instant loan is minimal. You can use your smartphone to upload documents online. Once you meet the eligibility criteria, you must take the necessary steps to submit the essential documents. The documents required are.
Identity proof: You must provide an Aadhaar card, a PAN card, a passport, or a driver’s license, as identification.
Address proof: Acceptable forms of address proof include your rental agreement, passport, and utility bills (such as those for your mobile/landline, electricity, or water).
Income evidence: To receive a loan right away, you must submit your bank statement and the last three to six months’ salary slips as proof of your income.
Steps To Apply For An Online Instant Personal Loan
In minutes, you can get hassle-free instant personal loans from banks, NBFCs, and peer-to-peer lending platforms. You can quickly apply for a loan on each lender’s official website and receive a response.
Online application on lender’s website
The first step in the loan application process is choosing your lender. To ensure no problems with your loan application, check your eligibility. You can check your eligibility by using a loan eligibility calculator and filling in details such as basic, financial, and employment information.
Customize your loan amount according to your financial needs. To customize, two factors are essential – loan amount and tenure. In addition, you must also consider the EMI and repayment period when deciding the loan amount and tenure. Calculate your EMIs using an online calculator to help you determine the best loan amount and repayment schedule. By doing this, you can make on-time EMI payments and raise your credit score.
Documents and eligibility
Once you meet the eligibility criteria and your application is approved, you will need to provide supporting documents to validate the application. You can complete the process by uploading the necessary documents online. Ensure that all the required documents are ready for uploading online for quick loan approval. You can fill out the online application form while uploading the necessary documents.
Disbursement of funds
Following loan approval, download the agreement and a few essential papers following the checklist. Each document must be signed before submitting it. The lender will check your documents using cutting-edge technology like artificial intelligence. After completing all required verifications, they will initiate an immediate disbursement of the loan amount to your account. If you have filed the necessary document, this process should only take 24-36 hours.
Hence, to apply for an instant loan, you must follow the above steps so that your loan approval is smooth and hassle-free
The Bottom Line
Online instant personal loans are becoming very popular due to quick approval and simple accessibility. The market for these loans is expanding, and online lenders are gaining significant market share. An instant personal loan is convenient and straightforward to apply for. You can submit your loan application in its entirety at any time, either in person or online. To apply for an instant personal loan, you need some basic or minimal documents. The funds will typically be transferred to your bank account if your loan application is accepted.