What is an Instant Loan?

In today's digital era when things happen at the snap of a finger, it is natural for individuals to expect the availability of quick funds in the form of loans for various needs. Personal Loan is one such product which is quick and hassle-free provided you have a good income, good credit score, and good repayment capacity. Even here you will have to fill in an application, submit a pile of documents, and make multiple visits to the financial institution to get the loan approved and disbursed. In the normal course it would take 4 to 7 working days to get the approval of the loan. These days with such busy schedules nobody has the time to wait for such a long time since instant happening is the order of the day.

Instant loans are also Personal Loans with a difference. The tedious loan processing ordeal has been made simple and quick by instant loans. You can get the loan so fast when you apply online that it seems like an instant loan. Instant loans are a smart way to borrow since you get instant approval without much documentation. It requires 100% paperless documentation and gives you a seamless and digital borrowing experience.

How Does it Work?

Initially, you have to decide the financial institution from where you intend to avail the loan. Apply for the loan online through their official website. Fill in the loan application online by providing the details required. Upload softcopies of documents required for an instant loan. The documents will be verified and within no time they will let you know about your eligibility for the loan. Thereafter the loan will be disbursed within a few hours' time. Don't you think this is instant enough?

If you want to make the process faster it is better to do the eligibility check before applying for the loan. All this can happen even without you visiting the financial institution personally. Even e-signing of the loan documents is possible.

In a nutshell the instant loan process happens in 5 steps:

  • Apply for the loan online
  • Do the eligibility check
  • Complete the documentation
  • E-signing of loan documents
  • Loan disbursal

Purposes of Instant Loan

The instant loan can be used for any purpose. There is no restriction on its end use. Funding for any emergency can be done by the instant loan. It all depends on your income, credit score, and repayment capacity. Since the funds are available instantly the loan comes with a higher rate of interest compared to the other loans. The best aspect of this loan is that there is no hassle of providing collateral security.

Funding wedding expenses

Most of us want weddings, be it, our own wedding or wedding of our children, to be the most memorable one. The wedding expense does not end with just booking the venue. It also involves the purchase of jewellery, wedding trousseau, decorations, good food, booking accommodation for guests, and so on. Since it is an once-in-a-lifetime affair, you will not want to compromise on any aspect. However, where will you fund the expenses from? Most of the times savings alone will not suffice and alternate sources have to be looked for. Instant loans come handy at such times, since the funds will be available immediately and you will not lose out on time for the wedding arrangements.

Planning a vacation

Out of the blue you decide to surprise your family with a vacation at an interesting location. If the vacation has not been planned earlier it will be difficult for you to arrange funds. The best source of funds will be an instant loan. You can apply for the loan online and get the disbursement within 2 hours if all the eligibility criteria are met with. Planning a vacation would have otherwise been so stressful.

Meeting medical emergencies

Medical emergencies may crop up at any time. Medical insurance cover has been designed to provide for such eventuality, but at times the treatment will be so expensive that only the insurance cover and the savings might not be sufficient. Instant loans can be availed to bridge the fund gap for such treatments.

For business requirements

In business, the journey is not always smooth. There are ups and downs and you should be prepared for any emergency. At times you may be going through rough weather in your business and there might not be enough cash generation.

In the meanwhile, imagine you bag a huge order which can bring you out of the situation but you do not have adequate funds to execute the bulk order. Every businessman would have gone through such a phase. Even difficult it would be if the order has to be executed within a short period. Availing a Business Loan would mean a wait for many days and you do not have the time. For such emergencies, the best answer would be availing instant loan where you will get funds within 2 hours of application.

Instant Loan Offers of Top Banks

Approach your bank for an instant loan. Most banks today offer Instant Personal loans for their customers as well as non-customers at attractive rates. Check with your bank for emergency cash needs and avoid taking loans at high interest from the informal sector or save yourself from the embarrassment of borrowing from your friends or family. Most top banks offer instant loan within 2 to 4 hours.

ICICI Bank Instant Loan

ICICI Bank offers Pre-approved Personal Loan which is an instant loan facility for select customers. Existing customer with good credit history and track record becomes eligible for Pre-approved Personal Loan. The processing of this loan is quick and the amount gets disbursed in seconds.

Axis Bank Instant Loan

Axis Bank offers instant loan to existing customers as well as non-customers with good credit history, stable income, and repayment capacity. The loan when applied online will be approved and disbursed within a few hours. This instant loan is the best option to cater to immediate needs.

HDFC Bank Instant Loan

HDFC Bank Instant Loan enables you to live your life to the fullest without compromising on your dreams. HDFC Bank offers instant loan with a competitive rate of interest and flexible repayment option to suit your pocket. The most attractive feature of their loan is the superfast disbursal. HDFC Bank Instant Loan is the best solution to live life the way you wish to.

No matter why you need a Personal Loan, HDFC Bank can customise the loan for you. If you already have an HDFC Bank account, you can benefit from special rates, charges and offers. Bank also offers a host of benefits for first-time loan customers.

The loan is disbursed within 10 seconds for an existing customer and within a few hours to new customers.

Kotak Mahindra Bank Instant Loan

Prepping up for your dream vacation or planning for higher studies of your child at one of the best universities or planning a home renovation, but falling short of cash? Kotak Mahindra Bank Instant Loan can be the answer to meet all your above requirements. Availing loan at Kotak Mahindra Bank is totally hassle-free with easy documentation, flexible repayment options, and quick disbursal.

The banks mentioned above are some of the top banks that offer an instant loan. There are many more banks and other financial institutions that offer instant loans.

Instant Cash Loans

The banking scenario has become very competitive with a lot of players in the market. Banks and other financial Institutions are constantly bringing in innovative measures to lure customers. With the advent of technology, everything is happening within a blink. The turnaround time for any service has become the major component to delight the customers in the banking arena.

Top of the Line Facility

Banks are able to cut down on time required to provide service with the help of technology. Tracking of credit information has become that much easy with advanced technology. The readily available data has made the loan processing simple. This has enabled approval of loans within a short duration. Risk is minimised since the approvals are done based on pre-verified information. Financial institutions have introduced a digital platform for customers to apply for loans at the comfort of their homes. Instant Cash Loan is one of the facilities where the turnaround time is just a few hours.

Personal Loans when applied online become hassle-free with minimum to paperless documentation and instant disbursal. The loan proceeds will land in your account within no time.

Loan in Seconds

Some of the top banks like ICICI Bank, HDFC Bank, to quote an example, disburse Personal Loans to their existing customers within seconds of receiving a request. These loans are generally given to existing customers with good credit score, income, and good repayment capacity. Though this loan can be availed with just a click, it is always advisable to have the repayment plan before applying for the loan.

A Seamless Online Process

While applying for the loan online you have to provide accurate information in order to accelerate the process. Any mismatch in the information provided will delay the loan process. Verification and validation of information will be done in no time and the loan proceeds will be credited to your account within seconds. The banks can access to KYC details through Aadhaar linking which has significantly reduced the loan processing time. You can apply for the loan 24X7 through net banking.

Drawbacks of Instant Cash Loan

One of the main drawbacks is that you might be tempted to avail a loan even when not required since it is available so easily. If you fall prey to this temptation you will land in a web of unwanted debt. These loans are no doubt easily available but they come with a high rate of interest. Ascertain the hidden charges and interest rate to assess the cost of the loan and go for it only if it is worth taking.

Benefits of Instant Cash Loan

Though the Instant Cash Loans have their own drawbacks, they do have a lot of advantages, the main advantage being the quick disbursal. Availability of the funds instantly in case of emergencies is the best advantage of this loan. However, understanding the terms and conditions of the loan is much required before availing the loan.

Features of Instant Loans

Key Features of Instant Loans

  • Purpose: There is no restriction on the end use of the loan. Loan can be utilised for purchasing a gadget, education expenses of children, wedding expenses, travel expenses, business requirements, and so on. The list is exhaustive. It can be used for just about anything.
  • Quantum: The quantum of loan ranges from 50,000 to 50 Lakhs depending on the bank you avail the loan from. The quantum is decided based on your income and repayment capacity. The debt to income ratio is assessed after consolidating all your present commitments along with the equated monthly instalment (EMI) of the proposed loan. The amount is fixed so as to fit into the debt to income ratio prescribed by the respective bank.
  • Interest: Interest varies from 10.99% to 22% depending on the bank from where you avail the loan.
  • Security: This is an unsecured loan and so no security or guarantee is required
  • Repayment: Flexible repayment period from 12 months to 60 months. This gives you the option to choose an EMI that suits your pocket.
  • Processing charges: Processing charges range from 1% to 2% of the loan amount plus applicable tax depending on the bank.
  • Pre-payment charges: Pre-payment charges ranging from 2% to 5% on the outstanding balance on the day of pre-payment depending on the Bank. Such pre-payments are allowed only after payment of 12 EMIs.

Benefits of Instant Loan

  • Tenure of the loan: The loan is generally availed in case of emergencies. You may not intend to carry on the burden of debt that was incurred during an emergency for a long period. The flexible repayment period enables you to repay the loan as early as 12 months.
  • A simple way of applying for a loan: You can apply for the loan online, at the comfort of your home.
  • No physical documents required: You need not submit a pile of documents. All you need to do is upload soft copies of documents required.
  • Quick processing: Tracking of credit information of the applicant can be made online. This has reduced the loan processing time significantly. Even the documents verification and validation has been made very simple. The loan is approved and disbursed in as short a time as 2 to 4 hours for non-customers and within seconds for customers.
  • Execution of loan documents: E-signing of loan documents has been made available. This avoids your visit to the bank for the execution of documents.

To sum it up, online application, approval, and disbursal of instant loans have made the experience of availing loan a simple and hassle-free one. The best advantage is that now you can avoid multiple visits to the bank for availing the loan.

Instant Loan Eligibility Criteria

Eligibility criteria to avail instant loan vary from bank to bank. The general eligibility criteria are as listed below:

  • Employees of Central/State Government Department, Corporates, Reputed Companies, PSUs, self -employed professionals, and non-professionals can apply for the loan.
  • Salaried individuals should have a minimum experience of 2 years in the present job and self-employed professionals/ non-professionals should have been in the present business at least for 2 years.
  • The minimum income should be between 15,000 to 20,000 p.m.
  • Applicant's age should be between 21 years to 60 years
  • The credit score should be 750 and above

Documents Required for Instant Loan

For Salaried employees

  • Duly filled application form for an instant loan
  • Passport-sized photographs of the applicant
  • ITR records from the last 2 years.
  • Proof of identity such as the applicant's Passport/ PAN Card/ Voter ID/ Driving License
  • Proof of residence such as Registered Rent Agreement/ Leave and License/ Utility Bill of at least 3 months/ Passport.
  • Proof of income such as last 6 months' salary slip, Form 16 of 2 years, bank statement of at least the last 6 months that reflects salary being credited or EMI being debited.

For Self-Employed

  • Duly filled application form for an instant loan
  • Recent photographs of the applicant in passport size
  • Proof of identity such as the applicant's Passport/ PAN Card/ Voter ID/ Driving License
  • Proof of address such as Registered Rent Agreement/ Leave and License/ Utility Bill of at least three months/ Passport.
  • Proof of business like GST Returns/ company's incorporation details
  • Address proof of the business
  • Bank account details, and balance sheets showing profit and loss statements which have been certified by a CA
  • Proof of the business's existence
  • A copy of the partnership deed and business profile
  • For doctors, architects and chartered accountant - proof of qualification

Tenure, Loan Amount, Interest Rates, Approval Charges for Instant Loan

  • Tenure: The tenure of instant loan is 12 months to 60 months
  • Interest: The rate of interest charged for low risk borrowers is much less than the rate charged for high risk borrowers. The risk factor is generally assessed by the repayment capacity of the borrower. If the income and credit score of the borrower is good, they are considered as low risk borrower and vice versa.

The factors that affect the fixing of interest are:

  • Borrower's income: If the loan amount is commensurate to the income of the applicant, then the repayment of the loan is assured. In such cases the interest will be charged at a concessional rate.
  • Credit score: Banks generally verify the credit score before making a credit decision. A credit score indicates the credit and repayment history of the borrower. If the repayments are made on time and there is a mix of secured and unsecured loans then the credit score will be good. A credit score of 750 is considered as a robust score. Borrowers with a good credit score will be charged interest at a concessional rate.
  • Tenure: Short term loans will attract a higher rate of interest as compared to long term loans.
  • Instant loan approval charges: The approval charges for an instant loan are:
    • Processing charge: Processing charge varying from 1% to 2% plus applicable taxes will be charged on the loan quantum which has to be paid upfront.
    • Pre-payment and part-payment charges: If surplus funds are available and you intend to either pre-close or make part-payment for the loan, it is allowed with a charge. Such a facility is available only after payment of a minimum of 12 EMIs. The pre-payment and part-payment charge varies from 2% to 5% of the outstanding principal balance on the date of pre-payment or part-payment plus applicable tax. The charge depends on the bank you choose to avail the loan from.
    • Delayed payment charges: If the payment of EMI is delayed for any reason, a delayed payment charge of 2% on the overdue amount for the overdue period will be charged. This not only adds to the cost of the loan but will also impact on the credit score.

Understanding the Loan EMI

Equated Monthly Instalments popularly known as EMI is the amount paid towards a loan availed which includes both principal and interest component. EMIs offer a flexible repayment option which is very convenient for the borrowers. EMI mainly depends on the loan amount, tenure and interest.

With an EMI Calculator you have the option to choose the EMI that suits your pocket by trying various combinations and permutations.

Factors Affecting the EMI

  • Loan amount: Loan amount you wish to borrow is the key factor. Interest is applied on the loan amount and EMI is fixed based on the tenure.
  • Interest: Interest also plays a significant role in fixing the EMI. Higher the rate of interest higher the EMI and lower the rate of interest lower the EMI. If the interest charged is fixed then there will be no change in the EMI. If the interest is floating, then the EMI will be rescheduled as and when the interest changes.

    Here you have an option. You can either change the EMI or get the tenure re-fixed. If you have chosen a maximum repayment period then you will not have the option of changing repayment tenure when the interest increases.

  • Tenure: The longer the period the lower the EMI and vice versa. You can choose the repayment period according to your convenience. If you can afford a higher EMI then it is better to choose a shorter repayment term. This will reduce the cost of the loan.

Here again, if you have multiple commitments, then try various permutation and combination and choose an EMI to suit your pocket using an EMI Calculator.

The EMI should be chosen in such a way that the outgo on the consolidation of present commitments including the proposed EMI should satisfy the debt to income ratio stipulated by the banks.  Normally the total outgo towards all your financial commitments should not be more than 50% of the net take home salary. This is insisted to make sure that you have sufficient funds for your monthly subsistence.

Calculation of Instant Loan EMI

EMI of instant loan can be calculated by applying a simple formula:

EMI = {P x R x (1+R)^N}/{(1+R)^N-1}

In this formula:

EMI is Equated Monthly Instalment

P = is principal or the sanctioned loan amount

R = is the Rate of Interest. Interest should be monthly rate.

N =  is the tenure

Tips to Avoid Rejection

The main parameters that are looked into before making a credit decision are credit score and income of the applicant. If you ensure that these are as per the requirement of the banks, then there is no reason why your loan application should be rejected.

  • Check credit report: Credit report denotes your credit history and repayment pattern. All the present financial commitments will be reflected in the credit report. Also, the promptness in loan repayment will be seen in the credit report.

    Study the report before approaching a bank for a loan. If you find any discrepancies, get it corrected before applying for the loan.

  • Check the credit score: Check your credit score before applying for the loan. The credit decision of the financial institutions is based on the credit score. A score of 750 is considered as a robust score. If your score is less than 750 there are chances of the loan application being rejected.
  • Avoid multiple applications: Do not approach various financial institutions in the quest of loan in a short span. Too many enquiries listed in your credit report will bring down the credit score. Also, it gives an indication to the financial institution that you are always in need of funds and you are credit hungry. This will give them a warning signal that there are chances of the loan going bad at some point in time.
  • Fixed obligations to income ratio (FOIR) or debt to income ratio: This is the ratio arrived at considering all your present financial commitments including the proposed EMI and the net monthly income. The normal ratio fixed is 50%, i.e., the total outgo towards your commitments including the proposed EMI should not be more than 50% of your net monthly income. This indicates your repayment capacity. If the ratio exceeds 50% then the banks will assume that you may default in repayment at some point. Ensure to keep the ratio within the stipulated benchmark before approaching for a loan.

Dos and Don'ts

Do's

  • Check Eligibility: To understand the best offer you should know your eligibility. Before applying for a loan checking your eligibility is recommended. Checking eligibility online is a very simple process. Check your liability and do research of options in different financial institutions to strike the best deal.
  • Credit Score: A good score is one of the prime criteria to be eligible for the loan. Before applying for a loan, check your credit score to ensure approval of the loan without any complication.
  • Tenure: A short tenure will reduce the interest outgo towards the loan. This will in turn reduce the cost of the loan. If you can afford a higher EMI, opt for a short tenure so that you can reduce the cost of the loan and keep the loan burden low.

Don'ts

  • Borrow only as much as you require: Just because the loan is available easily, do not borrow recklessly. Assess your requirement and borrow only as much as you require. In case a need for funds arises in the future you can always borrow once again by way of top-up loan or a second loan.
  • Borrowing beyond your affordability: Borrow only as much as you can afford. Assess your monthly expenditure and the outgo towards present financial commitments and then decide to borrow. You borrow only if you feel that you can manage the additional burden month on month. If you do not manage your funds with prudence, you will end up defaulting repayments which will impact your credit score.
  • Defaulting EMI payment: Ensure your affordability before availing a loan. Manage your finances meticulously and do not delay EMI payments. Defaulting or delaying EMI payments will have a negative impact on your credit score. Delayed payments will attract penal charges which will add to the cost of the loan.

Instant Loans: A New Era in Banking

With the advent of technology, there has been a remarkable change in the turnaround time of services provided in the banking sector. Digitisation has been one of the major reasons. Earlier opening a bank account to availing a loan was a tedious experience. It required multiple visits to banks and long waiting to complete the process.

Loan processing was elaborate and time-consuming. Introduction of the digital platform has paved the way for a New Era in Banking. Every banking transaction can happen within the comfort of your home. Instant loan is one such product. You can apply for a loan online and get the funds in your account within a few hours. A few years ago, no one had imagined that such things could happen within the comfort of your home. Instant loans are indeed the beginning of a New Era in banking.

How Do Quick Loans Work?

A quick loan popularly known as the instant loan is a Personal Loan where the processing of the loan is done online. Tracking of credit information of the applicant can be done online with the help of advanced technology. Online linking of aadhaar to bank accounts has made the KYC verification simpler. Pre-set computer programmes enable faster processing of loans. The speed involved in approval and disbursal of instant loans has made it a very popular product. Despite being a costlier loan when compared to secured loans, instant loans are one up in the credit market.

Fintech lenders have a major role to play as they have made the loan processing so simple that the funds are available at the nick of the time for those who need it the most. Emergencies can be handled with less stress with the immediate availability of funds. If you have checked your eligibility and have submitted the required documents, funds will be available in your account within no time.

Instant Loans/Pre-approved Loans

  • Pre-approved loans are given only to existing customers of financial institutions. Whereas instant loans can be availed by new customers on fulfilling the eligibility criteria.
  • Pre-approved loans require zero documentation since the financial institutions already have the credit information of the customers. An instant loan involves paperless documentation as it requires only soft copies of relevant documents.
  • Pre-approved loans have a pre-determined upper limit depending on the creditworthiness of the customer. It may or may not be adequate for the purpose it is meant to be utilised. Whereas with an instant loan you can apply for the required amount as per your eligibility.

Advantages of Applying Online

Applying online for Personal Loans has made the whole process delightful. The advantages of applying for a loan online are many, such as:

  • You can avoid multiple visits to lending institutions for applying and getting the loan approval. Everything can be done at the comfort of your home or office.
  • You need not submit a pile of documents. All you need to do is scan the relevant documents and upload the soft copies.
  • Online application for a loan makes the processing faster. Online applications are processed through algorithms and hence the processing is faster and simpler when compared to manual processing.
  • Tracking of loan application becomes easy with online application for a loan. Soon after applying for the loan online a login ID will be provided. With this you can log in to your online loan account and track the status of the loan application.
  • You can apply for a loan online anytime 24X7 on all 365 days unlike the traditional way where you have to abide by timings and holidays of the lending institution.

Why Apply for Instant Loan Online through MyMoneyMantra?

MyMoneyMantra is a one-stop solution for all your financial requirements. You can apply for the instant loan through MyMoneyMantra to make the whole process seamless and easy. MyMoneyMantra will take care of all the process that is required after filling the application online. For this you have to make use of the digital platform of MyMoneyMantra and apply for the loan by following some simple steps:

  • To begin with, log in to MyMoneyMantra's website and choose Personal Loan from the Loans menu.
  • Select the loan scheme
  • Fill in all the relevant information required for applying for the loan
  • Once the filling of the application is complete and the process initiated the representative of MyMoneyMantra will contact you and guide you through the entire process.

Frequently Asked Questions - Instant Loan

What is an instant loan?

An instant loan is an instant Personal Loan applied online through net banking or ATM if you are already a customer of the lending institution. Otherwise you can apply online through their official website or through MyMoneyMantra. Processing of the loan is done online and the disbursal will be made within a few hours.

What is the quantum of instant loan?

The quantum of loan ranges from 15 Lakhs to 50 Lakhs, depending on the financial institution you choose to avail loan from.

What are the eligibility criteria for an instant loan?

The following are the eligibility criteria for instant loan:

  • Employees of Central/State Government Department, Corporates, Reputed Companies, PSUs and self -employed professionals and non-professionals can apply for the loan.
  • Salaried individuals should have a minimum experience of 2 years in the present job and self-employed professionals and non-professionals should have been in the present business for at least for 2 years.
  • The minimum income should be between 15,000 to 20,000 p.m.
  • Applicant's age should be between 21 years to 60 years
  • The credit score should be 750 and above

What is the interest charged on instant loan?

The interest charged ranges from 10.99% to 22% p.a., depending on the lending institution you choose to avail the loan from.

How to check the status of loan application for an instant loan?

You can check the status of the loan application online. Soon after you apply for the loan online, the lending institution will provide you with a login ID. You can log in to your online loan account using the login ID and track the status of the loan application.

Are there any additional charges for an instant loan?

A processing fee ranging from 1% to 2% of the loan amount and requisite documentation charges will be collected depending on the lending institution.

What are the loan tenure options?

The loan can be repaid within 12 months to 60 months. This flexible repayment option makes it easy to choose an EMI to suit your pocket.

How to apply for an instant loan?

If you are an existing customer of the bank you can apply for an instant loan through net banking or ATM. Otherwise you can apply for an instant loan through the official website of the respective bank.

Is pre-payment option available for instant loan?

The loan can be pre-closed but only after paying a minimum of 12 EMIs. A pre-payment charge ranging from 2% to 5% on the outstanding loan amount will be charged depending on the financial institution.

OTP is sent to your mobile number

Enter OTP

Resend OTP