Small personal loans are short-term, unsecured loans given to people with urgent needs. Someone can easily apply for a small loan online since you don’t have to purchase any collateral. However, some companies only let their employees use it.
With a small personal loan, one can pay it back in as little as two months or as long as 18 months. This means they’ll pay very little interest on the borrowed amount. They will get the best interest rates, and the application process is easy.
The borrower needs to attach a few simple documents to finish the process. Also, there is no fee to apply for a small personal loan. And if the application for a small personal loan is approved, the loan amount will be sent to the bank account within a few hours.
Since it’s a personal loan, it can be used in any way. The money from a small personal loan can be used for emergencies, like paying medical bills, tuition, home repairs, international travel, and other costs. Someone can use it to meet their immediate and short-term needs.
Benefits of a Small Personal Loan
- No Collateral
Because small loans are unsecured, you don’t have to use anything as collateral to get the money. They are great if you need money immediately but need something to put up as collateral.
- Minimal Documentation
Since there is no need for collateral, you don’t have to complete a lot of paperwork to get one of these loans. Your processing time will be low if your documentation matches the bank’s criteria.
- Same-Day Approval
Some small loans can be given out quickly and with support on the same day. When you apply for one of these loans, the money is sent to you on the same day your loan is approved. So, you can be sure you will be given the money immediately.
Eligibility Criteria for a Small Personal Loan
A person applying for small loans online should meet the following requirements:
- Must be a citizen of India
- An individual who is self-employed or paid a salary
- At the time of the loan application, they must be at least 21 years old.
- Earn at least Rs. 10,000 each month (varies from lender to lender).
- Must have a current government ID.
How to get a Small Loan instantly
Personal loans that don’t need collateral are a common way to get the cash you need immediately. It can be used for many things, like weddings, home improvements, trips, and more.
There are no rules about where you can use the money. The person who borrows it can use it for anything. A personal loan can help you build your credit more quickly.
Here are some tips given to get a small loan instantly:
- Apply Online
Applying for a small loan online is the fastest and safest way. The lender will send a confirmation message after the application has been sent with the necessary information and paperwork.
After verifying the profile and supporting documents, the lender will decide whether or not to approve the loan.
You will get all the required updates in your email from the banks. Once you complete all the required paperwork, the loan approval process usually takes 5 to 7 days. After approval, the lender will send the money within one or two business days.
- Good credit score
The credit score shows how good or bad a person’s credit is. A credit score of at least 750 can make it easier to get a small loan, but a score of at least 700 is usually considered good.
You must have a good credit score if you want your loan approved. This is the most important thing that lenders look at when deciding whether or not to give you a loan. It is especially true for small personal loans, which are not secured and don’t need collateral. This helps get a better interest rate and lower processing fees, making the loan more likely to be approved quickly.
- Don’t go to many banks for a loan. When people need money quickly, they often apply for personal loans with more than one bank or NBFC. They believe this increases their chances of getting a loan as soon as possible.
- Keep the documentation ready.
Before applying for a small personal loan, ensure that one has all the necessary documents. Since the loan is not backed by anything, lenders usually only want a few records.
One can find the list of required documents on the lender’s website or by asking a bank representative. The loan process can be sped up if all the paperwork is ready.
The required documents are usually:
- Pan Card, Aadhar Card, and passport for identity proof
- Aadhar Card, voter ID, or electricity bill for address proof
- Salary statements from the past three to six months (for salaried people)
- Current Income Tax Return (ITR) and income computation (for self-employed people)
- Certification by a Chartered Accountant (CA) for the last two years in the form of a balance sheet and profit and loss statement (for self-employed people).
Getting a small personal loan looks easy, but it is not. The above tips will help one process their loan quickly. Even though most people need a small loan immediately, they should take time to get one. They should do research. Then, they must send the application to the lender who best meets their requirements.
The borrower must know all the rules and fees to avoid surprises later. Some of these fees are for processing, prepayment, and foreclosure.
Applying for small loans online can be handy for those who need money urgently. Small Loans will help them repay the money in easy monthly instalments without burden. Piramal Finance is one of India’s largest financial institutions. It funds people in all sectors, like wholesale and retail. It is best suited for small loans, and it offers many services to its customers.