Our lives are unpredictable, and no one can predict our paths. We can see our societies surrounded by the fear of medical and financial emergencies. Insurance of all sorts is way too standard than ever before. In such situations, an instant loan is a right option to avail. But before strangling ourselves with the intricacies of the instant cash loan online, it is well advised to clear our basics first.
What is an Instant Cash Loan?
An instant cash loan is unsecured, meaning any collateral does not secure it. The online cash loan amount can range from Rs. 10,000 to 2 lakhs and is usually applied for emergencies. Such situations include uncalled home repair costs, sudden medical issues, a sudden travel plan, etc. These types of loans are most suitable for fulfilling short-term cash requirements.
The other advantage is the quick processing of the loans. These features of instant cash loans act immensely helpful and can be accessed and used immediately in emergencies. For instance, some banking institutions use words like Cash advance or Pay Day loans for such types of loans.
What Are the Different Types of Instant Loans?
- Personal Loans: In times of emergency or financial crisis, banks tend to offer this type of loan. The loans can span from Rs. 30,000 to Rs. 40 lakhs. The only requirement to avail instant cash loan in this category is that the person should fulfil the eligibility criteria of the specific bank. The rate of interest is generally higher in this type of loan.
- Short-Term Personal Loan (STPLs): Non-Banking Financial Companies and some Fintech companies offer these types of loans. The loan amount can be as low as Rs. 1,000 and is provided mainly through their mobile applications. However, it requires verification of certain documents.
- Top-Up Loan: This loan is to avail extra loan amount over already existing loans. Usually, this sort of loan is taken on top of home loans. This loan takes less time to process as the bank already approves the person and verifies the documents.
- Loan against Credit Card: This loan is provided only to credit card owners. The credit history is considered in finalizing the approval of the lending loan as this process is linked to credit cards.
- Loan against Savings and Insurance: Most people have their money in banks as savings are made available through the facility of loans.
Terminologies of Instant Loans
- Processing fee: It is the one–time fee charged by the loan lending banks for offering instant loans quickly.
- Default Penalty: If the EMI is not paid at the time, the lender charges an additional penalty.
- Repayment Flexibility: The provision allows pre-payments or part-payments to pay off the loan before the tenure.
What Are the Eligibility Criteria for Instant Cash Loans?
The eligibility criteria for a quick cash loan application differ slightly for individuals and businesses.
For individuals, the person must be an Indian resident and be at least 18 years old. In addition, the person should have a stable income stream, an active bank account, and a banking card.
For businesses, the age and residence requirement is the same. Moreover, the company’s turnover must fulfil the account’s criteria per the bank. Also, the business should have been active for quite some time to be eligible.
Documents Required for a Personal Loan
The document required concerning the instant cash loans application online process varies slightly for individuals and businesses. These documents include proof of identity (Aadhaar card, PAN card, Passport, Voter Card, Driving license, etc.), age(birth certificate, 10th mark sheet), and proof of residence.
For business, KYC documents of the businessman, business address proof, proof of citizenship, PAN card, and the bank statement of the business’s bank account for the last 12 months. In addition, all the documents of loans, Income tax returns, audited balance sheets, and other documents are required.
How to Take an Instant Cash Loan?
Most instant cash loans are available through the apps of the bank or loan lending institution or from the website. For instance, one can easily access the app or website and the instant loan section. As mentioned earlier, no collateral is required in instant cash loans, so very few documents need to be uploaded, one of them being KYC (Know Your Customer) in the app server. As a result, the loan amount gets processed and reaches the bank accounts quickly.
What Are the Benefits of an Instant Cash Loan?
- Applying for personal loans usually involves a lot of paperwork and to-and-fro from the banks to get the loan approved. The loan application gets accepted and processed, and the money is then sent to the account, which consumes a lot of time. In Instant Loans, the documents have to upload online without any hassle. In loans from previously approved customers, the required documentation is significantly less.
- The no-collateral feature is one of the most promising features of an instant cash loan.
- The loan amount can be chosen flexibly by the customer (provided it falls in the range of loan amount allowed by the bank as an instant cash loan), which can help to customize the loan as per the requirement.
- One of the least available loan options is the time required for processing the loan amount and transferring it in a lump sum to the bank account.
- In most cases, the borrower can determine the tenure of the loan. The term should be within the range allowed by the loan lending firm. So, it is a significant advantage for people to plan out their finances comfortably and repay the loan without adding much stress to the family’s financial status.
- The benefits of Credit scores are immense. In instant cash loans, too, one can get shocking reductions in interest rates when having a good credit score. It helps to keep the instant cash loan less expensive to the pocket. A CIBIL score (credit score) above 750 is big-up for any person and can help avail a chunk of reduction on interest rates of the loan.
It is well advised to use an EMI calculator before taking any online cash loan for any amount. Once all the raw figures are collected and arranged orderly, it helps to clean out the finances very effectively.
A person can effectively use the benefits available as an instant cash loan and solve the fundamental problems for which this particular loan is intended. From emergencies of health to finance, the instant cash loan online is the perfect answer to all sorts of short-term extra cash requirements.