Things to Look for Before Applying for Emergency Line of Credit or Instant Personal Loan

Things to Look for Before Applying for Emergency Line of Credit or Instant Personal Loan

With the country on lockdown amid the Coronavirus outbreak, it has indeed become necessary for people to rebalance the portfolios and analyze the health of their finances. Opting for an emergency line of credit is one strategy to bridge the small cash gaps. However, before you go ahead to apply for instant loan online, you should carefully assess the decision.

Well, Instant Personal Loans are all the rage since the past 2 years. There are a bunch of reasons why these are so popular. First, they are very easy to apply for. You can apply for the loan online or through an app in your mobile phone. Second, they are very fast in terms of loan processing and disbursal. You get almost instant transfer of authorized loan amount to your account. Third, these loans do not require a lot of paperwork. Just some basic KYC documents and income proof, and you are through. Finally, with Instant Personal Loan, you can even borrow money if you have never taken a loan earlier and have no credit history or CIBIL score.

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Money View-

Money View Personal Loan is one such instant loan. They offer you the option to check your loan eligibility as fast as in two minutes, and you can get the money in your account within 24 hours. The entire process is paperless and is completed through their app or website. The company is also able to lend to people with low or no credit score because of the alternative borrower scoring system.

The basic eligibility requirement is an income of Rs. 13,500 in hand per month for both salaried and self-employed borrowers. With the Money View, CIBIL Score of 650 or Experian score of 750 will suffice. Borrower’s age bracket should be between 21 years and 57 years.


MoneyTap is another popular instant Personal Loan serving Indian customers. They offer a line of credit instead of a direct Personal Loan. Here you are given a credit account with a set credit limit. You are required to pay interest on your drawings on a regular basis until you can repay the entire principal amount. You also get the option to convert your entire borrowing in an EMI based repayment schedule. MoneyTap credit limit can be as high as Rs. 5 Lakh, depending upon the borrower profile. The limit can be revised occasionally. You can register and get your credit limit set up on the app and utilise the credit line on an ad hoc basis.


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Just like with any other loan, you must consider a few basic factors when you borrow from these Instant Personal Loan lenders. Here is a list of few important questions you must answer before applying for a loan.

1. How much can you borrow and repay comfortably?

This is obviously the most basic and most important consideration with an Instant Loan. Since the process is very simple, many people tend to overborrow and then get stuck with what amount they need to repay as EMI.

Check many options about how much you can borrow and calculate how comfortably you can fit the repayment in your monthly budget. As with any loan, it is always best to get minimum loan amount and to keep EMIs balanced between how much you can pay every month and for how many months do you want to keep on paying the EMIs.

2. What are the interest rates being charged?

This is the second most important consideration for instant Personal Loans. You must always consider the amount being charged to you by different lenders. Compare between different Instant Loan providers, and then compare them to traditional banking and NBFC borrowing channels. You will have to strike a balance between what is the amount of interest you are ready to pay and how much you value convenience. See if there are other factors where traditional banking channels do not really compare to the new there lenders. Needless to say, you should consider choosing the lender that charges the lowest interest rates.

3. What are the processing charges involved?

Processing charges tend to vary from lender to lender. It is always best to shop around for the lowest processing charges because these are sunk costs. They will be deducted from the sanctioned loan amount before disbursal to your bank account. Generally processing charges are levied as a percentage of the loan amount involved but it is always recommended that you check up with the lender sales team and try to reduce processing charges. Why pay extra when you are already paying so much as interest on the loan already!

4. What are the repayment options and tenure available?

Instant Personal Loans also come with the flexibility of repayment. Still it is always best to check beforehand about what are the loan tenors available and what are the modes of repayment you can choose. Make sure that you choose the loan tenure in which you can comfortably repay your borrowings. The common options range between a few months to 5 years. The most common and easily the best way to repay is through auto-debit, where you need to maintain enough balance in the bank account from where the money will be auto deducted. Other repayment options that should be available include manual repayment through NEFT, RTGS, or through UPI.

5. What are the implications of missed payments?

Fifth question you must ask is what are the implications of missed EMIs. Check about all the charges related to payment delays, including all the fines and extra interest that can be levied. Several lenders will excuse one or at most two instances of delayed EMI payment. Still it is best to not rely on this aspect. Most of the Instant Loan companies will ask you to deposit a missed EMI with some extra charges but in case you miss the EMI on a frequent basis, they may start to impose heavy penalties. So always check out these details in advance.

6. Can you get an alternative source of funding?

This means that you can also explore some out of the box alternatives to instant loans including getting some short-term loan from friends and family or even taking out a Credit Card loan. These are options to be used only if all else has failed and you are left with no choice. Considering there are a large number of players in the instant Personal Loan market as of now, you do not need to worry about asking to your friends. With some effort you can easily find a lender to provide you instant Personal Loan on conditions perfectly matching your requirements.

Also Read: Top 8 Instant Personal Loans Online in 2020 – A Quick List

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Category: Personal Loan