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How To Apply For An Instant Personal Loan Online? Research Team | Posted On Friday, July 27,2018, 04:18 PM

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How To Apply For An Instant Personal Loan Online?



What will you do if you need money for an emergency? You may think of borrowing from friends and relatives. Let’s face it, in times of financial emergencies, not all your relatives and friends are happy to lend money. So, why stretch your hands? Avail a personal loan instead.

Online personal loans are also known as paperless personal loans. The paperless personal loans are nothing but a personal loan that can be availed within a very short duration of time. You will not have to deal with lot of paperwork as the process is completely online from the beginning to the end. The loans are processed very fast and are quickly disbursed, which is why the online instant personal loan has become a popular loan instrument among the masses.

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How To Apply For An Instant Personal Loan Online?

What is a Personal Loan?

A personal loan is a short-term loan which can be availed to meet financial emergencies. Since it is a short-term loan, borrowers are supposed to repay the personal loan within a short time.

Personal Loans are also called Emergency Loans. These are unsecured loans as the lender doesn’t ask for collateral/security. This is the reason why banks charge higher rate of interest on personal loans.

Lenders are offering personal loans, online. These are paperless loans and make the application less complicated. You can get an online personal loan approved quickly without much hassle.

Features of an Online Personal Loan:

1. No reason loan:  A personal loan is a no reason loan. Banks don’t ask you the reason when you apply for a personal loan. You can use the personal loan for any reason. However, there are various types of personal loans which are discussed later in this article.

2. High-cost loans: Personal Loans are high-cost loans because they have high-interest rates and short repayment tenure. This makes EMIs costly.

3. Easily approved: Emergency loans are approved real fast and often disbursed within a day or a few days. So, they are easy to access.

4. Negotiate for best interest rates: Negotiate with banks to get the best rates. Even a difference of a fraction of a percentage in rates makes a huge difference in EMIs.

5. Read the loan agreement carefully: Details like charges, fees and penalties for non-repayment of a personal loan are mentioned in the fine print of a loan agreement.

6. Defaults and credit score: Default in the repayment of personal loans can affect your credit score.

Instant Online Personal Loans:

Online personal loans, also known as paperless personal loans, make the whole application process less complicated. You can get an online personal loan approved with just a few clicks. Online personal loans have less human intervention and are quick, effective and simple for both the lender and borrower.

Benefits of an instant personal loan:

  • Online personal loans in India are paperless, hence eco-friendly.
  • The application for the loan is processed online, thus it saves time and energy.
  • Documents needed for the loan can be uploaded online.
  • If all details and documents are furnished correctly, loans are disbursed within 24 hours.

Documents for online personal loan:

  1. Identity Proof: PAN, Passport, Driving License, Aadhaar Card, Voter ID.
  2. Address Proof: Passport, Driving License, Voter ID card.
  3. Age Proof: PAN, Passport, Driving License, Voters ID, Birth certificate, school/ college leaving certificate.
  4. Financial Statements: Bank statement of past 6 months.

Eligibility for online personal loan:

The most common eligibility criteria for availing a personal loan are:

  • Applicant must be an Indian resident
  • Minimum age should be 21 years in case of salaried and 25 years in case of self-employed.
  • Maximum age of the applicant must be 58 years at the time of loan maturity
  • Applicant’s monthly net income should be at least Rs 15,000-20,000.

Points to Consider before Applying for instant Personal loan:

If you are thinking of taking or applying for a personal loan for an emergency, do keep in mind the following points before availing the loan:

Flat interest rates:

Do not be attracted to a loan product just for low interest rates. It is important to go through all the terms and hidden costs that involve availing the loan. Flat interest rates loans are typically offered at a much lower interest rate. However, that does not mean you pay less. There are hidden costs and charges involved.

Consider your needs before borrowing:

Banks try to lure customers into taking loans. You might be eligible for a higher loan. But before availing the loan, consider the amount you need to meet financial goals. Borrow the amount that you need to meet the emergency expenditures. Do not borrow more just because you are eligible. Always remember personal loans are one of the most expensive kinds of loans.

Check your CIBIL score before applying:

Banks and other financial institutions consider the CIBIL score before sanctioning the loan. Therefore, it is wise to check the CIBIL score before applying for the loan. Generally a score above 750 is considered to be a good CIBIL score.

Fees and charges:

All loans include a processing fee, which gets deducted from the loan amount, before the disbursal. Apart from processing fees, there are also late payment charges and prepayment charges. Therefore, make sure to check the details regarding fees and charges, before availing the loan.

A streamlined online process:

The process of applying for an instant personal loan is completely online. So, an individual must ensure that the information submitted is completely authentic. A small mismatch in the information may cause delay in the disbursal of the loan.

The money is directly credited to the customer’s bank account after the disbursal and deduction of the processing fees. In the past, the customer had to go through the hassles of physically going to the bank and submitting documents. The disbursal process took several days for authentication and approval. In case of instant personal loans, the process is streamlined and faster. Through the Aadhaar, the banks can easily access the KYC documents. So the process of disbursal of the loans takes much lesser time.

To avail an instant personal loan, the customers must login to their bank account or simply apply through net banking. The process is entirely paperless and is processed online. The customers will no longer have to wait for the disbursement of funds. The instant online personal loan is an easy and convenient way to avail funds during an emergency medical situation. It is a speedy banking solution to your instant cash requirements. 

How to apply for an instant personal loan online?

In case of emergency, all you have to do is visit your bank’s website and submit your online personal loan application and documents. Lenders sanction personal loans based on your CIBIL score and credit history.

Process to apply for an online personal loan:

1. Visit the website of the lender which is the bank, NBFC or any other financial institution.

2. Fill out an application form for an online personal loan on the website.

3. Check out if you are eligible for the personal loan.

4. If the bank is offering door-step service, their relationship manager will fix an appointment and visit your premises and collect documents. Alternatively, some banks also offer the facility to upload documents online.

5. The lender will review your personal loan application.

6. If the lender is satisfied, your loan will be approved and funds will be disbursed. The funds will be deposited in the same bank account for which you have given the statement.

SEE ALSO: Warning Signs Of Debt Taking Over Your Life

Drawbacks of the instant personal loan:

You might be tempted to take a loan leading to a debt trap. Always keep in mind, personal loan are one of the most expensive kind of loans. Make sure to go through the interest rate, the hidden charges and the amount and duration of the EMIs. Go through the rates offered by other banks and decide wisely.

How you can benefit?

There are certain benefits of availing instant personal loans. The time taken to process and disburse the loans is minimum as compared to other loans. The loans are flexible and can be availed and used as per the needs of the borrower. These loans are applied online. Even after the disbursal process, the customer can easily stay updated on the loan by accessing the details through mobile apps or through net banking. Most of the banks extend their repayment tenure up to 2 years, which results in low cost EMIs. You can install the Instant Personal Loan Online App

Instant personal loan interest rate:

The credit score of the borrower is evaluated before sanctioning the loan. There are certain parameters on which the borrower’s eligibility is measured. These personal loan interest rates are based on the credit worthiness of the borrower’s. Depending on the different criteria, the interest rate ranges from 11.99% to 24% per annum. Borrowers with a good credit history can avail instant loans at low interest rates. 

Types of online personal loans:

As mentioned earlier, there are different types of personal loans. They are:

1. Festival Loans: As the name suggests, Festival Loans are availed to take care of festive expenses. These loans have:

2. Wedding Loans: Wedding Loans are availed to meet wedding expenses like hotel bookings, jewelry purchases, catering, decoration, hall expenses and so on. These loans have higher interest rates during the peak wedding season.

3. Holiday Loans: Holiday Loans are availed to meet travel bills of a vacation. These loans prevent you from dipping into your savings. The loan amount depends on your creditworthiness and travel destination. These loans have a lower interest rate compared to credit cards.

4. Home Renovation Loans: Home Renovation Loans are availed to finance the expenses of repairing and renovating your house. The interest on these loans are exempt from tax.

5. Consumer Durable Loans: Consumer Durable Loans are availed to purchase consumer durables.

Top 5 Providers for Personal Loans in India:

The top 5 banks that provide personal loan in India are listed below:

  • HDFC bank: the HDFC bank provides personal loans at lower interest rate along with other benefits on the loan.
  • ICICI Bank: the personal loan interest rate starts from 13.99%
  • Axis bank: the bank provides loan at a competitive interest rate of 15.5% to 24% at zero processing fees.
  • State Bank of India: it is one of the most famous banks that provide personal loan at lucrative interest rates.
  • Bajaj Finserv: it is a non banking financial company whose personal loan interest rate starts from 16%.

Do's and Don’ts of Personal loan:

The things that you should do while availing a personal loan are as follows:

  • Make sure to do proper research on the rates of interest and prepayment charges applied by various banks before applying for the loan.
  • Make sure you read the fine print of your personal loan document carefully. You should be aware of all the terms and conditions associated with your personal loan.
  • While repaying the loan make sure to make the payments on time. Do not delay your payments as it may lead to late payments charges.
  • Before applying for a personal loan, check your credit score. A good credit score get loans sanctioned quickly.
  • Make sure to evaluate your requirements carefully. Do not borrow heavily only because you are eligible. Repayment of loans takes time. So borrowing more will unnecessarily increase debts.
  • The things that you should not do while availing a personal loan are listed below:
  • Do not sign the loan document without understanding the terms and conditions.
  • Do not take the loan without serious reason. Personal loans have high rates of interest that you may find difficult to repay.
  • There are multiple types of personal loans available in the market. Hence, you will have to be financially sensible while choosing them. Personal loans will help you enhance your financial wealth and assist you in attaining your financial goals. 

How to calculate EMI on personal loan?

An individual can easily calculate the EMIs for personal loans, using the EMI calculator available online on the websites of various loan aggregators. The Personal Loan EMI Calculator  allows users the option of calculating their monthly instalments in case they avail a loan by changing the loan amount and tenure. EMI loan calculator tool is a great option for users before applying for a loan, helping them choose the most suitable loan as per their financial budget.

Factors that Affect Personal Loan Interest Rate:

The credit score of the individual plays an important role in the loan getting sanctioned. When you apply for the loan, the lender goes through your credit history. There are other parameters as well that the lender considers before sanctioning the loan. They are income, employment status and previous payment records.

The individual applying for a personal loan must have a steady source of income. Also, the lenders generally sanction loan if your CIBIL score is 750 or above.

Checklist for Applying for Personal Loan:

While applying for personal loan follow the below mentioned points in order to have a smooth lending process:

  • Check your eligibility for a personal loan.
  • Submit the various documents required to avail the personal loan.  Provide the proof of address, age proof and income proof along with bank statement and passport sized photographs.
  • If you are a salaried individual submit form 16 along with the duly filled application form.
  • In case of self employed individual you can furnish your income tax returns, profit and loss account, income statement, and balance sheet for income proof. For office address proof, you can give property documents, utility bills, or maintenance bills.
  • Along with these documents and the duly-filled loan application, make sure that you have filled every field of the application form with accurate details.

FAQs on instant personal loan:

1. Is it safe to borrow online instant personal loan?

It is completely safe to borrow for loans online. The net banking account is attached to the bank account. The banks maintain privacy of customers, thus keeping the personal and financial details of the customers confidential.

2. How the instant loan facility works?

The instant loan facility works in a very efficient manner. The borrower has to fill an application form that includes details regarding personal information. The submitted data is processed and the loan is approved and processed within hours. The borrower is informed on the progression of the loan through a call or SMS. Once informed, the borrower must upload the required documents. Thereafter the loan gets disbursed within 24 hours.

3. How much money can I borrow?

Depending on the credit rating and purpose, a borrower can avail an amount anywhere between Rs 25,000 to Rs 5,00,000.

4. What are the advantages of applying for instant loans online?

The advantages are as follows:

·       Quick processing

·       No physical documents required

·       Hassle free and smooth processing

·       Normal interest rates

·       Loan amount starting from Rs. 50,000

5. What is the impact of GST on personal loans?

The personal loan involves other charges along with service tax. Normally there are processing fees and pre-payment charges on which service tax is levied. But after GST, a standard GST will be charged along with the above mentioned charges.

6. Can I get a personal loan if I have home loan?

Yes, A person can avail personal loan along with existing home loan. However, the banks do not offer loans if your debt to income ratio is more than 50%.

7. Is it good to pay off credit card debt with a personal loan?

Personal loans have lower interest rates than credit cards. A personal loan may be a good option if you have very high credit card debt. You can pay off your high interest credit card debt and then pay off your personal loan at a lower interest rate.

8. What if I don’t pay the EMI on a personal loan?

Below mentioned are the consequences for failing to pay EMI on personal loan:

  • It badly affects your credit score.
  • The collateral provided for the loan gets affected
  • The bank can take legal action if the payment is not done for very long period.

9. What is minimum salary required to get personal loan?

The minimum salary required to avail a personal loan for a salaried employee is Rs 15,000 in rural areas and Rs 20,000 in case of metro cities.

10. What is the best credit score or CIBIL score to get a personal loan?

The CIBIL score should be 750 points or above. Generally a score above 750 is considered to be a good CIBIL score.

11. How do I cancel personal loan after the loan is disbursed?

You can cancel your loan application within the withdrawal period. To cancel the loan applications within the withdrawal period contact, the bank directly and inform them.

12. Can I get personal loan without a salary slip?

Yes, you can avail a personal loan without a salary slip. However, banks list salary slip as a requirement for availing personal loans. A personal loan without a salary slip might not be as easy to procure and will require the applicant providing sufficient proof of income.

13. Can we use personal loan for marriage purposes?

Yes, you can avail a personal loan for financing any emergency situation or for spending on expenses like wedding or pursuing career goals.

14. Can I take a personal loan from two different banks at the same time?

Yes, it is possible as long as the combined loan amount from the two banks is within the eligible limit based on income and obligations. For Business Loans, a lot of times multiple lenders/banks join together to give a loan to a Company. You can avail loans from two banks at the same time.

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