Emergencies don’t announce their arrival. You could be sitting on your sofa at home, and disaster could strike. That is why it is very important to have access to funds. Digital personal loans where you can get instant approval and disbursal are the answer to this problem.
If you consider the fact that earlier, we would have to submit mountains of paperwork and wait for days while the banks verified your credibility, this is a step up indeed!
But how is it possible? What are the eligibility criteria? What documents are required? What is the interest rate?
Let’s take a look at the process through which you can get an instant personal loan at home!
Instant Personal Loan: Eligibility Criteria
The eligibility criteria for an instant personal loan are not very stringent. In most cases, you just need to have a source of income. That’s all. You can be salaried, self-employed or even pensioned. In terms of the recommended age limit, it ranges between 21 and 60 years. In some cases, it can even be extended up to 68 years.
When it comes to taking out a personal loan, however, credibility is the key. Keep in mind, that these are unsecured loans. That means the bank or NBFC is essentially taking you at face value and trusting your ability to repay the loan amount.
There are some guidelines that you can adhere to to make the process easier.
- If you are a salaried employee, that adds hugely to your credibility.
- It is ideal if your monthly income is at least Rs 25,000 per month.
- You should have been at your current job or practice for at least 6 months before applying.
Please keep in mind that these criteria are not set in stone. There are numerous loan providers in the market, and you can easily find one that fits your purposes.
What Documents are Required for an Instant Personal Loan?
There are three main documents that you need.
- Identity proof — This can include your Aadhaar, passport, driving license or voter ID card.
- Address proof — This can include your Aadhaar, passport, driving license, voter ID card or rental agreement or even any recent utility bill.
- Income proof — You can provide your salary slip and your recent bank statements.
Apart from this, you also need to submit a copy of your PAN card.
These documents are mandatory. As per RBI’s guidelines, banks and NBFCs are not allowed to disburse loans without the KYC documents from the customers. If you want a personal loan without submitting any documents, you will have to resort to a company that is not regulated by RBI.
What is the Interest Rate on Instant Personal Loan?
For personal loans, the interest charged is higher than most other forms of loans. This is because personal loans are unsecured in nature — they don’t involve any collateral asset. So, if you default on the loan and run away from home, the bank will have no recourse.
The higher interest rate charged compensates the bank or NBFC for the additional risk they are taking when they give out personal loans.
Generally, the interest rate on a personal loan varies from 12% to 35%. Which end of the spectrum you land up on will depend upon your credibility and the documents that you provide. It also depends on the amount of loan taken.
Most banks and NBFCs offer personal loans up to Rs 10 lakhs. If you take a personal loan jointly with another salaried individual, you can also get approval for higher amounts.
Why Should You Get an Instant Personal Loan?
- Immediate disbursalThis is the main reason why instant personal loans are so attractive. You can get the money on the same day. Sometimes, it is even credited in a matter of hours.If you had time to wait, you could have looked at many other sources of credit. But when it comes to immediate disbursal, an instant digital personal loan can save the day.
- No collateralSecured loans are cheaper. There is no doubt. But if you don’t have access to any collateral, then these options are closed. Personal loans are disbursed based on your credibility. Even if you don’t have any assets to your name, you can still get credit instantly.
- Flexible tenureThe tenure for repayment is flexible, depending on your convenience. It can range from 1 year to 5 years. However, please keep in mind that you will have to pay the additional interest charge if you opt for a longer tenure.
- Easy EMI availability You can customise your EMI payments depending on your ability. The entire process has been designed to keep your convenience in mind, and the EMI selection reflects that.
We’ve gone through the details of how you can apply for a personal loan, what the documentation requirement is and what the benefits are. However, there are a couple of other points that you should keep in mind.
A personal loan is a very easy credit. In the loan universe, it is the equivalent of a stranger in an unmarked van offering you candy. It often leads to debt traps and bankruptcy, if the terms are not understood or if the repayment is not done on time.
Does that mean you should stay away from personal loans?
No, absolutely not!
There are some situations where you need a personal loan, and no other form of credit is available. And also, if easy credit is being offered at your convenience, why should you not take advantage?
The thing that you need to keep in mind is to only take personal loans from trusted sources. There are many unregulated lenders in the market, who will provide instant personal loans with no paperwork whatsoever. You should stay away from them. Always go with RBI-regulated banks or NBFCs and make sure you understand the repayment terms correctly.
If you want to understand the features and check your eligibility, you can go reach out to the experts at Piramal Finance here.