What Are the Uses of Short-Term Instant Personal Loans?

No matter how meticulously you plan your future course life; it is going to have some surprises for you. Not all such life surprises are lovely. Some of them come with disastrous impact on us particularly the ones which need immediate financial attention. In India, banks along with other financing firms are designing new-generation products to offer financial assistance for everyone. 12 month loans were originally conceptualized in western countries like Great Britain and United States of America but such loans have become a hit all over the globe including India.

Primary goal of 12 month loans is to provide the borrower with a moderate amount of funds to cover his/her financial requirements. The borrower has to repay the loan within one year. This type of loan is also known as an instant personal loan, and these are unsecured borrowings.

Things You Should Know about Personal Loans in India

An instant personal loan is not typically available from private or public sector banks in India. Such loans can be taken from Fintech companies that operate in a parallel system besides banking network.  Once you receive approval on the funds, the money gets transferred to your bank account within 24 hours. You can transfer the amount to another account from where you withdraw the money via ATM or can issue a cheque to utilize the amount.

These loans can be paid back in 12 equated monthly installments. There are no prepayment penalties. Nor you have to pay any foreclosure fee. If you wish to prepay or close the loan early, you can do so without any extra charge. However, there are penalty charges on late and missed payments. These charges are usually high. So, you must make sure to repay the loan in time to save yourself for high penalties.

What is the Benefit of an Instant Personal Loan?

As the name suggests, the instant personal loan is a way to arrange for money from the lender till the time the borrower draws a monthly salary and gains back the power to pay back the loan. 12 month loans are highly appreciated by the consumers as they offer money almost immediately to cover any kind of fund discrepancy. There is no restriction on how to utilize the loan money.

Features of Instant Personal Loans

Below-mentioned are the features of this borrowing facility:

• 12 month loans are meant for emergency situations. Such loans get approved very quickly, even within 2 hours to 24 hours after you put the application.

• This funding option does not emphasize the credit history of the applicant as it focuses on the repayment capacity of the person. However, CIBIL 600+ is appreciated.

• These loans fall under unsecured short-term loan category.

• Any person who is at least 23 years old having a steady source of income can apply for the funds.

• The applicant should be an Indian citizen.

• Amount of loan is determined by the bank after taking the applicant’s source and nature of incomes into consideration. 

• The borrower must produce documents supporting his/her repayment capability like the salary slip or IT Return or Form 16 from the employer. 

• Documentation under such a loan scheme is minimal. The sanctioned loan amount is transferred directly to the borrower's bank account.

• As the loan amount is transferred to the borrower's bank account, the applicant must maintain a bank account.

For What Purpose You Can Choose an Instant Personal Loan?

Below-mentioned are some of the purposes that the loan can take care of:

1. Home Renovation: Many of you may keep home repairs pending because of lack of funds. But, now you do not have to wait for your monetary savings to grow. Nor do you have to wait for your monthly salary. Simply take the instant loan up to Rs. 1 lakh and get the home renovation done as per convenience.

2. Vacation and Travel: If you wish to travel to your favorite destination, then do not let insufficient finance stop you. Sometimes you may also have to make an emergency trip somewhere. At such a moment, you may not have cash in hand. In such a scenario, a quick loan in 2 hours can come to rescue. You can borrow as low as Rs. 10,000.

3. Medical Emergency: If your health insurance cover is insufficient to meet the costs of medical needs, then do not worry. Medical emergencies come unannounced, and the treatments also cost a lot. To meet these expenses, you can borrow cash from Fintech firms, and fulfill your requirements.

4. Big-Ticket Purchase: There are times you may have to purchase a gadget or an electronic item. For this, you need enough funds. But, you may delay the expense and not fulfill the need. However, a ready solution is an unsecured loan. This can help get you funds for important big-ticket purchases.

5. Wedding: If you are falling short of funds for your wedding, then you may take an unsecured personal loan. The funds can be used for all the expenses of the marriage. There will be no limitation on which events or purposes you can utilize the loan amount.

6. Debt Consolidation: If you have several loans ongoing, then you can consolidate all under an instant personal loan instead. Doing so may save you on interest payout of all the running loans, altogether. It will also bring all the loans under a single one, wherein you have to manage only a single EMI every month.

Why to Make Timely Repayments?

Delaying the payments will also affect your credit score. The repayment history is reported by the lender to the credit bureaus. This is why it is important to make timely repayments. Otherwise, it can take a lot of time to recover the earlier credit score, and built it once again. A bad credit score will hamper your chances of securing a new credit in the future.

To Conclude

An instant personal loan is helpful in many ways. Due to instant disbursal in 24 hours or less, this borrowing facility is popular among salaried individuals. This product can be used to build credit scores. Being a short-term borrowing, you can even repay the debt faster, and save a lot on the total interest payout. You can close the loan at convenience as and when you come into money, by the end of the tenure, anytime. There are no questions asked on how you use the funds. You can use the loan amount as per your wish.