An instant loan is a short term loan that's typically for a small amount of money and comes with high interest rates and fees. Instant loans are available in a few varieties: Payday loans. Also called a cash advance, a payday loan doesn't require collateral and offers you cash on the same day.
A loan app is an easier, faster option than traditional lenders
Though most people make a beeline for traditional lenders when they require a personal loan – especially if they are enticed with ‘pre-approved instant’ loans – it is always a more prudent choice to take the loan from a reputed loan app. The best loan apps in India offer flexible application processes, minimal documentation, quick approval, and good interest rates on loans.
Moreover, the loan is repaid digitally instead of issuing cheque for the payment. The ease of application and disbursal and the fast-processing speed make loan apps a more attractive funding solution than traditional lenders.
You can use the personal loan for any suitable purpose
he biggest benefit of taking the instant loan is that the money can be used for practically any purpose that seems suitable, whether personal or professional, emergent or not. You have the liberty to use the money to start a small home-based business, or pay your child’s semester fees, or fund a home remodel, or even buy the new iPhone.
Personal loans help you build credit
This factor is important for those with a low credit score because of poor repayment history or never borrowed an institutional loan before. Borrowing a quick loan and repaying it within its term helps you build a good credit score. In turn, a good credit score enables you to borrow bigger loans (such as a home purchase or renovation loans) in the future.
The documents list is minimal
Another area where the instant loan scores over secured loans are in the documentation process. Instead of a long list of documents and tedious legal and residential/ office credential checks, the loan app does a quick but thorough check of the submitted documents, repayment history and credit score and sanctions the loan in a few hours. This is helpful for those who need the loan for an emergency and who do not have the time for a lengthy application and documentation processes.
What are the Important Points to Note on Instant Loans?
Before applying for an instant personal loan, it is necessary to compare the loans offered by different lenders. Here are a few points that you should take into consideration when comparing instant personal loans:
· Processing Fee: Almost all banks and financial institutions offering instant loans charge borrowers a one-time processing fee. If you are charged a high processing fee, you will need to pay more for your loan.
· Interest Rate: The interest rate that is charged by a lender can affect the total cost of the loan. Thus, make sure to check the interest rate at which the loan is offered before applying to a particular lender.
· Default Penalty: If you do not repay the EMIs as per schedule, the lender may charge you a default penalty. Hence, it is important to compare the default charges levied by different lenders.
· Repayment Flexibility: It is best to opt for an instant personal loan that offers repayment flexibility in terms of allowing you to make pre-payments or part-payments towards your loan amount, especially if you are intending to pay off your loan before the end of the loan tenure.
Short-term loans come in a variety of forms that include short-term payday loans or cash advance loans.
Other traditional short-term loan forms include credit card cash advances, personal loans, and installment loans.
Since many people cannot qualify for a traditional or bank loan due to low credit scores or cannot get cash from their credit card, they consider a short-term payday loan online.
Short-term payday loans are for emergency situations like emergency car repairs, utility or electricity bills, medical bills, or just when you do not have the cash to pay for simple groceries or other necessities.
Short-term payday loans can cover you in emergency situations until your next payday.Read more
A short term loan is one that is taken out to meet a short-term personal or business capital requirement.
Because it is a form of credit, it entails repaying the principal amount plus interest by a specified due date, which is normally one year after the loan is obtained.
A short-term loan is an excellent choice for small enterprises or start-ups that do not yet qualify for a bank credit line.
The loan involves smaller amounts of money borrowed, ranging from $100 to $100,000.
It must be paid off within six to a year – at most, 18 months – in most situations.
Long-term loans can run anything from a few months to 25 years.
