- Date : 08/12/2020
- Read: 5 mins
Here’s a list of the different kinds of instant loans one can avail of, and how to get one.
Applying for a loan has traditionally been a lengthy process that could take anywhere from a few days to a few months. However, in these times, you can apply for an instant loan. With these, you can have a loan amount disbursed in a few minutes, and you can spend it on whatever you had in mind. Here are some types of instant loans you can avail of:
Short-term personal loan
These are also known as ‘advance salary’ loans and are designed to get you through a tight financial spot at the end of the month. As such, they are specifically tailored to a salaried employee, and are usually capped at a certain percentage of the person’s monthly income. This figure can go up to 2.5 times the monthly salary of the applicant. Tenures range from 1 month to a year, and loan amounts can be as small as Rs 1000. Interest rates start at around 2% per month.
Related: Personal loan or Credit card loan: Which one should you opt for and when?
Rental loan
These are loans designed to help ease the burden of saving up for a deposit on a rental apartment. The bank offers the deposit amount as a loan, and only the interest has to be paid over the tenure of the loan agreement, which typically mirrors the rent agreement’s tenure. In the end, the principal amount of the loan is returned to the bank. This is helpful to the borrower as a large amount of savings isn’t locked up as deposit money. There are usually no prepayment charges for such a loan, which gives the applicant some flexibility.
Loan against collateral
This is given against collateral such as gold or fixed deposits. Secured loans have the advantage of lower interest rates, since the collateral offers security to the bank. The maximum amount for a loan against collateral is usually calculated as a percentage of the value of the savings or gold. This works as an instant loan if the savings or gold is held by the bank that is issuing you the loan, and the value of the gold is already known. Banks will sanction loans of up to 95% of the value of an FD. However, certain FDs (such as those in the name of a minor, or five-year tax-saving FDs) do not qualify for this type of loan.
Related: How to avail loan against your insurance policy?
Loan against credit card
This one is quite popular and requires minimal paperwork. The disbursal time is also fast. It is usually offered by banks to customers who have had a credit card for a significant amount of time with the bank, and have a clean repayment history. A loan against a user’s credit card does not eat into the card’s limit, unlike a cash withdrawal or EMI purchase, which is a factor in its popularity. Taking a loan against your credit card? Here are some things you must know
Personal loan
Personal loans are offered to customers with a high credit score and a good repayment history. However, most of them do not have any collateral and thus come with a high interest rate. The amount one can apply for could vary from a few thousands to many lakhs, since people apply for personal loans for a variety of reasons – such as going on a vacation, or for wedding expenses. In fact, some personal loans are marketed as ‘vacation loans’ or ‘wedding loans’ to remind consumers that personal loans can be used for these purposes. Banks will even sell a personal loan to consumers trying to apply for a two-wheeler loan, as this means no hypothecation and therefore no paperwork for the consumer once the loan has been paid off.
Related: Personal loan or credit card loan: Which one should you opt for and when?
Top-up loan
These ride on an existing loan that is being repaid by a consumer. Top-up loans began as an avenue to easily purchase a larger property, but they have now expanded to different segments such as automobile and personal loans as well. An instant top-up loan will recalculate the EMI and interest rate based on the applicant’s eligibility, and disburse the additional amount almost immediately, with zero or minimal paperwork.
Instant two-wheeler loan
Banks and NBFCs provide instant two-wheeler loans with minimal paperwork on proving eligibility as they have realised that high-end two-wheeler purchases are mostly impulse purchases. The instant two-wheeler loan can also be used to purchase a used two-wheeler, since banks are usually hesitant to offer loans against a used vehicle purchase. Instant loans for two wheelers can range from Rs 3000 to Rs 5 lakh, and interest rates start at 13 percent per annum.
Eligibility and application process for an instant loan
To be eligible for an instant loan, the best thing is to have a great credit score. That means paying your bills and EMIs on time, keeping your credit card spends low but using your cards often, and not keeping an overly large amount for your credit limit. Banks will often offer an instant loan to those with good credit scores and credit history. All you need to do is check with your bank and go through the terms and conditions before you agree to the disbursal. Need money instantly? These sources can help.
Applying for a loan has traditionally been a lengthy process that could take anywhere from a few days to a few months. However, in these times, you can apply for an instant loan. With these, you can have a loan amount disbursed in a few minutes, and you can spend it on whatever you had in mind. Here are some types of instant loans you can avail of:
Short-term personal loan
These are also known as ‘advance salary’ loans and are designed to get you through a tight financial spot at the end of the month. As such, they are specifically tailored to a salaried employee, and are usually capped at a certain percentage of the person’s monthly income. This figure can go up to 2.5 times the monthly salary of the applicant. Tenures range from 1 month to a year, and loan amounts can be as small as Rs 1000. Interest rates start at around 2% per month.
Related: Personal loan or Credit card loan: Which one should you opt for and when?
Rental loan
These are loans designed to help ease the burden of saving up for a deposit on a rental apartment. The bank offers the deposit amount as a loan, and only the interest has to be paid over the tenure of the loan agreement, which typically mirrors the rent agreement’s tenure. In the end, the principal amount of the loan is returned to the bank. This is helpful to the borrower as a large amount of savings isn’t locked up as deposit money. There are usually no prepayment charges for such a loan, which gives the applicant some flexibility.
Loan against collateral
This is given against collateral such as gold or fixed deposits. Secured loans have the advantage of lower interest rates, since the collateral offers security to the bank. The maximum amount for a loan against collateral is usually calculated as a percentage of the value of the savings or gold. This works as an instant loan if the savings or gold is held by the bank that is issuing you the loan, and the value of the gold is already known. Banks will sanction loans of up to 95% of the value of an FD. However, certain FDs (such as those in the name of a minor, or five-year tax-saving FDs) do not qualify for this type of loan.
Related: How to avail loan against your insurance policy?
Loan against credit card
This one is quite popular and requires minimal paperwork. The disbursal time is also fast. It is usually offered by banks to customers who have had a credit card for a significant amount of time with the bank, and have a clean repayment history. A loan against a user’s credit card does not eat into the card’s limit, unlike a cash withdrawal or EMI purchase, which is a factor in its popularity. Taking a loan against your credit card? Here are some things you must know
Personal loan
Personal loans are offered to customers with a high credit score and a good repayment history. However, most of them do not have any collateral and thus come with a high interest rate. The amount one can apply for could vary from a few thousands to many lakhs, since people apply for personal loans for a variety of reasons – such as going on a vacation, or for wedding expenses. In fact, some personal loans are marketed as ‘vacation loans’ or ‘wedding loans’ to remind consumers that personal loans can be used for these purposes. Banks will even sell a personal loan to consumers trying to apply for a two-wheeler loan, as this means no hypothecation and therefore no paperwork for the consumer once the loan has been paid off.
Related: Personal loan or credit card loan: Which one should you opt for and when?
Top-up loan
These ride on an existing loan that is being repaid by a consumer. Top-up loans began as an avenue to easily purchase a larger property, but they have now expanded to different segments such as automobile and personal loans as well. An instant top-up loan will recalculate the EMI and interest rate based on the applicant’s eligibility, and disburse the additional amount almost immediately, with zero or minimal paperwork.
Instant two-wheeler loan
Banks and NBFCs provide instant two-wheeler loans with minimal paperwork on proving eligibility as they have realised that high-end two-wheeler purchases are mostly impulse purchases. The instant two-wheeler loan can also be used to purchase a used two-wheeler, since banks are usually hesitant to offer loans against a used vehicle purchase. Instant loans for two wheelers can range from Rs 3000 to Rs 5 lakh, and interest rates start at 13 percent per annum.
Eligibility and application process for an instant loan
To be eligible for an instant loan, the best thing is to have a great credit score. That means paying your bills and EMIs on time, keeping your credit card spends low but using your cards often, and not keeping an overly large amount for your credit limit. Banks will often offer an instant loan to those with good credit scores and credit history. All you need to do is check with your bank and go through the terms and conditions before you agree to the disbursal. Need money instantly? These sources can help.
