How do Instant Personal Loans Work? Do You Need One?

Updated on: 05 Dec 2023 // 4 min read // Personal Loans
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Unexpected financial expenses do not always relate to emergencies. They can be connected to certain dreams and aspirations which you wish to fulfil but are not unable to realise due to lack of funds.

Many times, these vital expenses are not considered essential & you tend to postpone them till a time you have liquid funds in hand. But there is no guarantee that by the time you have accumulated the required amount; the need would remain the same.

Due to inflation and other economic factors, the real value of money reduces over time, and as a result, you may be unable to pay for the required expenses. Therefore, instead of waiting to fulfil your dreams and desires, you may choose to go after your financial needs right away. In these cases, Instant Personal Loans can help you undertake the necessary expenses without dipping into your savings.

The popularity of instant loans is steadily rising, and many financial institutions have indeed started offering swift loans for their customers. While some lenders offer these loans in the form of pre-approved personal loans, others follow a quick application process.

For instance, an HDFC Instant Personal Loan is available in the form a pre-approved loan for existing HDFC customers. For those who do not have a preapproved offer from their bank can opt for online lenders such as Kreditech offering instant loans.

Instant Personal Loans: Understand the Product

Instant Personal Loans are unsecured loans offered by traditional as well as online financial institutions for their customers. These loans are processed in a quick time, and the money is transferred to the account of the customer within a few working days. For instance, applications for a Kreditech Personal Loan can be approved within one to seven working days. As most financial institutions accept applications for instant Personal Loans through their website or mobile apps, the processing time taken is very less, and only a few documents must be provided.

These lenders follow relaxed eligibility criteria and offer instant personal loans for self-employed, professionals as well as salaried individuals. The maximum repayment tenor for instant loans can go up to 60 months with an attractive rate of interest. The maximum amount available in most cases is up to Rs. 25 Lakh.

How Instant Personal Loans Help to Fulfil Your Dreams

Now, let’s understand how Instant Personal Loans help to fulfill your dreams:

1. Quick approvals:

Most Instant Personal Loans are available in the form of pre-approved offers which are disbursed swiftly within a few working days; you need not wait for an extended period to access the required funds. With the ready availability of the funds, you can pursue your dreams and fulfil them instantaneously. Whether it is buying a new smartphone or going on a holiday, with instant loans, your dreams are well within your reach now.

2. Minimal documentation:

You need not compile a lengthy list of documents to apply for an Instant Personal Loan. These lenders require only basic KYC and financial information to process your application. Therefore, you are saved from the hassles of collecting various documents for loan approval. For online submission, you only need to attach the soft copy of the required documents.

3. Easy application process:

The process to apply for an Instant Personal Loan is very easy. In the case of pre-approved offers, you need not provide any documents at all as the lender already has your details in the system. When you apply through online channels like a website or mobile app, you only need to provide a few details to submit your application. If you opt to apply through offline channels, even then you only need to fill-up the application form and provide the photocopies of the documents to submit the application.

4. Extended repayment tenor: 

Instant Personal Loans come with an extended repayment tenor of up to 60 months. This means you can undertake the expense right now and pay it back in convenient EMIs. There is no need to make any lump-sum payment as you are supposed to repay the loan through easy EMIs. This extended repayment tenor allows you to select an EMI amount which you can conveniently afford.

5. Attractive Interest Rates:

The interest rates for Instant Personal Loans start from as low as 11.25%. This makes them an ideal option to fulfil your financial requirement instead of using a credit card, which comes with APR of up to 45%. Moreover, the attractive interest rates mean that not only you save money on the interest cost, you also have to serve a much affordable EMI, reducing the chances of default.

6. No collateral:

There is no need to offer any collateral for availing an Instant Personal Loan. This saves you from a lot of hassles, including the fear of losing out on the collateral due to default in payment. Moreover, no requirement of collateral saves a lot of time taken in processing the application.

7. Flexibility:

You are free to use the amount for any personal or professional requirement. There is no need to inform the lender regarding the intended usage of the money. This freedom allows you to pursue your dreams without any worries or hassles.

8. Foreclosure:

If you have availed the Instant Personal Loan due to immediate cash crunch and after some time you have got the required funds, you can foreclose the loan account. Though the lender might levy a foreclosure fee, you will save a significant amount on the interest cost. 

With so many advantages on offer, availing an Instant Personal Loan could be a blessing in disguise for you. After all, you get to fulfil your dreams without dipping into your savings and then have to repay the loan amount through easy EMIs only. Though, as it is still borrowing, you must exercise financial jurisprudence while availing this facility.