An instant loan has many advantages, especially when you need emergency funds. However, before getting to the instant loan benefits, it’s essential to understand – what is instant loan.
What is Instant Loan?
An instant loan is a multipurpose, no-collateral personal loan.
What is Instant Loan: Benefits
The main benefits of an instant loan are listed below:
What is instant loan if the loan application and approval is not quick and immediate? Generally, the lender already has the applicant’s information, reducing the processing time.
Most lenders now have an online paperless application process. You can visit their website or use their app for a guided application process. Instead of physically submitting all the documents, the online application process asks the applicants to upload their documents. If the applicant is pre-approved for the loan, the documentation is even less and sometimes nil.
Instant personal loans are unsecured loans and don’t require any collateral.
The application and processing time is quick, allowing for faster disbursals. You can expect to get the funds into your account in a few hours. This makes it a great choice in case of any emergency.
Unlike most other loans, a personal loan can be used for any purpose. You can use it in case of any medical emergency, business expansion, wedding expenses, vacation, education, etc.
Customisable Loan Tenure
Generally, with an instant personal loan, the lender allows you to choose the repayment tenure. This, however, will depend on the loan tenure range provided by the lender.
Flexible Loan Amount
Like the loan tenure, the applicant can apply for a loan amount as per their needs. Again, this will depend on the loan amount range the lender offers.
What is Instant Loan: Warnings
Instant loans can provide quick funds if needed, but they come with a catch like all things. Instant personal loans have a higher interest rate as the loan is unsecured. Remember only to borrow the amount that is required. Some lenders offer lower interest rates but then have hidden charges that add to the cost of the loan.
Some of these costs are:
Processing Fee – This fee is one-time and non-refundable and charged for the lender’s services in the application process.
Late Payment Charges – This is the amount the lender charges for defaulting on the EMI payment.
Pre-payment Charges – This is the charge levied by the lender in case you choose to repay your loan before the predetermined loan tenure.
All these costs can add up, so conducting proper research and reading all the documents carefully before applying for an instant loan is essential. Hopefully, with this article, you are now aware of what is instant loan, its benefits, and things to look out for.