What is an Instant Loan: Types, Advantage & Eligibility

Financial emergencies can arise unexpectedly, leaving you in urgent need of funds. An instant loan can be a lifesaver in such situations, providing quick access to the money you need. This access helps you gain financial assistance seamlessly during emergencies, thus providing relief.

This article explores what are instant cash loans, the different types available, their advantages, and the eligibility criteria for obtaining one.

Understanding Instant Loans

An instant loan is a type of personal loan designed to offer immediate financial relief. These loans are approved and disbursed quickly, often within a few hours to a day, making them ideal for urgent financial needs. Unlike traditional loans, which may require extensive paperwork and longer approval times, instant loans streamline the application process to provide fast access to funds.

Types of Instant Loans

The Different Types of Such Loans Are as Follows:

• Short-Term Personal Loans (STPLs)

Short-term personal loans, or STPLs, are gaining popularity due to their convenience and accessibility. These loans are designed to cover sudden financial shortages. The application process is simple and can be completed online. Many digital lending institutions offer STPLs, providing funds quickly once your documents are approved.

• Personal Loans

Personal loans are the most commonly availed form of instant loans. They have a straightforward application process with quick document verification. Some digital lending institutions even offer instant personal loans without any documentation. Loan amounts can range from Rs. 20,000 to about 40 lakhs, depending on the applicant’s credibility and eligibility. Although personal loans have flexible repayment terms, the interest rates are higher compared to secured loans.

• Top-Up Loans

Top-up loans are available to customers who already have an existing loan, such as a home loan, auto loan, or a 1 lakh personal loan. Since the necessary documents are already available from your existing loan, the approval process is faster. You only need to complete a few formalities to get the top-up loan.

• Instant Loan Against Credit Card

Credit card holders can avail of loans against their credit cards through their service providers. The loan amount and repayment terms depend on your credit score and credit card payment history. These loans are pre-approved and require minimal processing. You can apply for a loan against your credit card by contacting your credit card service provider.

Advantages of Instant Loans

Here Are Some of the Advantages Listed Below:

• Speed and Convenience

One of the primary advantages of instant loans is the speed of approval and fund disbursement. Many lending institutions offer online applications with quick approval times, ensuring you get the money you need without delay.

• Minimal Documentation

Instant loans require minimal documentation, making the application process straightforward. Basic documents like proof of identity, address, and income are usually sufficient, reducing the hassle associated with traditional loan applications.

• Flexibility

These loans offer flexibility in terms of usage. Whether you need funds for medical expenses, urgent home repairs, or travel, an instant loan can be used for any immediate financial need without restrictions.

• Accessibility

Instant loans are accessible to a wide range of borrowers, including those with less-than-perfect credit scores. Many lending institutions offer these loans based on income and employment status, making them available to individuals who might not qualify for traditional loans.

Eligibility Criteria for Instant Loans

The Eligibility Criteria Include

• Age and Residency

To qualify for an instant loan, you must be at least 18 years old and a resident of the country where you are applying for the loan. Some lending institutions may have a higher minimum age requirement.

• Employment and Income

Lending institutions require proof of stable employment and a regular source of income. This ensures you have the means to repay the loan. You may need to provide recent pay stubs, bank statements, or employment verification documents.

• Credit History

While instant loans are often available to individuals with varying credit histories, having a good credit score can improve your chances of approval and result in better interest rates. However, many lending institutions focus more on your current income and ability to repay rather than past credit issues.

Conclusion

Instant loans provide a quick and convenient solution for urgent financial needs. By understanding the different types of loans available, their advantages, and the eligibility criteria, you can make an informed decision and choose the best loan option for your situation. 

Whether you need a 1 lakh personal loan for an emergency or a payday loan to cover immediate expenses, instant loans can offer the financial support you need swiftly and efficiently.