Multiple banks. Different interest rates. Call it a "conflict of interest".
Loading your search...

Compare, check your eligibility and apply online instantly.


    Instant Loans

    A loan is an amount of money that’s given to you by a bank or financial institution, on the condition that you pay it back in instalments with an added rate of interest, on the bank’s terms. It’s an amount of money that’s borrowed, and paid back as a larger eventual amount.

    Instant loans are those that are approved really fast, without the need for guarantors, collateral, or too much documentation. All the lender really, vitally needs to establish is your identity. These are more commonly applied for and approved online with all necessary documents being sent via e-mail and verified online as well. Many banks and lenders in India offer instant loans like Bajaj Finserv, TATA Capital, GE Money, Fullerton India and HSBC to name a few.

    Almost everyone is eligible for an instant loan, despite factors like bad credit history and no collateral/guarantor, as they are given on terms that are highly beneficial to the lender. Interest rates vary between banks, but personal loans like instant loans have among the highest interest rates around.

    Loan interest rates vary based on many factors, like:

    • Income – how much you earn every month or year.
    • Type of employment – whether you’re self-employed or are a salaried employee.
    • Age.
    • Work location – whether in a metro city, rural area, developing town, etc. to determine your cost of living.
    • Current active loans – any EMIs or outstanding loans currently being paid off.
    • CIBIL score – a determiner of your ability to repay, based on past financial performance.
    • Loan amount required.
    • Tenure required – how long you expect to take to pay off your loan with EMIs.

    Another very important factor that decides your interest amount is how desperate you are for the loan. Remember payday loans in the US that charge anywhere between 160% to 1400% interest per annum? The fact that you are applying for an “instant” loan tells the bank just how desperate you are for finance on credit, and they don’t really care what the reason is. The average interest rates on instant loans is around 15% - 21%, depending on the lender. These are high rates of interest by any standard for the convenience of the finance being made available to you instantly. Beware of attractive packaging on your finance products, as they are (more often than not) wolves in sheep’s clothing.

    Instant loans are personal loans that get approved faster. They are there for you in times of dire need, and for the kind of sudden expenses that pop up and turn even the best and brightest of days into your worst nightmare. Most people who take instant loans do so for the lack of any other choice or avenue of quick finance. Those who don’t wish to borrow money from friends or family usually go in for these loans and the banks do not disappoint – by approving the loans quickly and disbursing funds instantly.

    Instant loans are generally used to cover:

    • Unforeseen wedding expenses.
    • College tuition expenditure.
    • Home and vehicle repair expenses.
    • Sudden medical expenditure.
    • Quick cash infusion into a business.
    • Instant requirement to purchase large assets, etc.

    Eligibility criteria for instant loans

    While the banks and lenders don’t put too much stock by your past credit history, they still require you to meet certain conditions and check certain boxes before they approve your loan.

    • You must be at least 18 years old at the time of applying for the loan.
    • You must draw a net monthly salary of / making business profits of:
      • Rs.40,000 if you live in Delhi/NCR, Mumbai, Hyderabad, Bangalore, Chennai or Thane.
      • Rs.35,000 If you live in Ahmedabad, Pune or Kolkata.
      • Rs.30,000 if you live in any other city in India.

    Please note that the above income requirements are indicative. Different banks and lenders require different incomes in this regard.

    • You must have an operating savings bank account.
    • You must be a resident of India.
    • You must have all the documents required.

    Documents required for instant loans

    Banks and lenders don’t care about your credit history, but will require you to furnish an original set of documents so that they can establish and verify the details you furnish in your application.

    The documents you submit will need to be official, verifiable documents attested with the seal of a governing body.

    • Photographic identity proof – could be a voter’s ID card, passport, driver’s license, PAN card, etc.
    • Passport and stamp sized photographs – keep around 5 with you, as the bank will require a few of them. And it’s the kind of thing that makes people run around at the last minute.
    • Address proof – could be your telephone / internet bill, rental agreement, house deed, passport, driver’s license, ration card, certified letter from employer, etc.
    • Signature proof – A few dozen specimen signatures, along with a document against which to compare them. Could be your passport, PAN card, Bank verification letter, etc.
    • Age proof – in case they doubt you’re above 18 because of your childish good looks, or if they just want to be safe. Could be your passport, driver’s license, PAN card, birth certificate, etc.
    • Current employment – documents to verify that you really do work where you claim to work. Could be your appointment letter, Form 16, 1 year old salary slip, etc.
    • Previous employment – if any, could be your appointment letter, Form 16, promotion letter, transfer or confirmation letters, etc.
    • Financial statements – from the bank, to ensure you are able to pay back your loan. Could be salary slips for the last 3 months. For non-salaried businesspersons, ITR and complete audited financials are required.
    • Bank statement – bank statement showing salary credited for the last 3 months.
    • Employment proof – Employee ID card and/or business (visiting) card.

    Features and benefits of instant loans

    • Can be taken on very short notice.
    • Offered by a large number of banks, lenders and financial institutions.
    • No credit-check or CIBIL inquiry.
    • Minimal documentation.
    • No collateral required.
    • No guarantor required.
    • Fast processing, with waiver of processing fees in some cases.
    • Flexible repayment options.
    • Part prepayment facilities – which mean that you can prepay your outstanding amount, in part or in full – depending on your lender. Some banks even offer you the facility to pay off your entire outstanding loan amount after 180 days of funds being disbursed.
    • Minimal or zero pre-closure charges. Loans can be pre-closed, by paying little or no penalties, depending on your bank.
    • Pre-approved offers for existing customers in most banks. If you’re an existing customer, it makes it easier to secure the loan, and on better terms than those that are offered to regular customers.
    • Loans approved up to Rs.25 lakhs. Minimum amount approved is Rs.1 lakh, and the maximum advertised ceiling is Rs.25 lakhs. If everything goes according to plan and your loan application is approved – you could have Rs.25 lakh in your bank account in a matter of hours.
    • Online account access – from most banks and lenders enable you to keep a real time check on your finances, how much you owe, how much interest is compounding, and how much you will eventually pay in total.
    • Insurance cover – some lenders give you complimentary personal accident cover and credit shield facilities, to sweeten the deal.
    • Cover financial emergencies – any financial emergency you may have, which is pressing in terms of the time you have to clear it – can be sorted out with instant loans. The entire purpose of instant loans from the customer’s point of view is to be able to clear all financial liabilities, and have a more flexible time period in which to pay back the loan taken.
    • It’s an unsecured, personal loan.

    Disadvantages of instant loans

    Just as instant loans have a host of benefits, they also have many disadvantages that could hurt your financial standing in the long run.

    • High interest rates – personal loans granted as instant loans carry among the highest interest rates of any loans in India. The ease they bring in terms of financial help is sometimes overshadowed by the high interest rates on EMIs, and the huge sum that you will eventually have to repay. Interest rates vary from 15% to 21%, a high range for any bank offering any kind of loan.
    • Longer time period = greater total cost – The longer you take to pay off the loan, the more potential problems you may face. A longer time period allows for more hiccups in your general rate of income, even the slightest dip in which could affect your repayment schedule. Missing an EMI payment means the bank will levy heavy fines and penalties which will compound to amount to a huge monthly instalment. A longer repayment schedule also means a larger eventual total cost, despite smaller monthly payments.
    • Debt transfer – The reason one would require an instant loan is usually an altogether unpleasant place to be in, financially. You may need it to repay a debt, or fulfil an emergency expenditure. Whatever the reason, the amount you will have to pay is just being transferred from who you actually had to pay, to the lender – and you will still have to pay it off, but now with a longer and more arduous process.
    • Tough terms and conditions – Banks and lenders can introduce difficult terms and conditions on your loan, the repayment schedules, EMIs, interest rates, and pre-closure terms. In the hurry to secure the loan, you may be agreeing to terms that could heavily damage your financial standing. For example, the loan may have a clause that prohibits part payments, settlements, pre-closures, etc.
    • Debt trap – If person who has never borrowed and finds himself against a wall, and the only way out is to take a loan – he may be trapped for the foreseeable future by the fact that he has to repay a larger amount than required. Missing payments would result in compounding penalties and interest, and the regular monthly payments may only scratch the surface of the capital amount that’s still due (after being used to clear penalties and interest charges). This would extend his repayment term, which would attract more fines.
    • Over-borrowing – Most of those who apply for instant loans sometimes get overzealous in the amount that can be borrowed. They lose sight of the expenditure for which they require the loan, and decide to solve two or three finance-related problems with the same loan. This leads to requesting a larger round-figure as a loan amount (cost of expense A + expense B + expense C + round off), and getting stuck in a pit of debt.

    How to apply for instant loans

    Most banks and lenders have the same system by which to apply for an instant loan. The broad steps to follow are:

    Step 1: Fill in the online application form or a hard copy of the application form available at the nearest lender’s branch office. This contains your personal information, professional information and details of income. It also contains information about your loan requirement and reason for the same.

    Step 2:Wait for conditional approval. All you do here is wait for the application to make its way to the desk of the bank official who has to scrutinize it and approve it. Once approved, a communication will be sent to you from the lender saying your application has been approved and asking for a set of documents (as mentioned above).

    Step 3: Know Your Customer (KYC) and document collection. Once you receive your approval, you must collect the required documents – identity proof, address proof, age proof, details of employment, proof of income and some specimen signatures. You can also send these across via e-mail, which makes the process a lot faster.

    Step 4: Credit to your account. Once the documents have been verified by the lender, the amount requested will be credited to your regular salary / business account.

    All these processes happen within a maximum time-frame of 72 hours. Some banks promise that it can happen in 48 hours, and some even say that the loan amount requested can be in your account within 24 hours from application. There are also lenders who approve the application and credit the amount in your bank account in matter of a few hours, once they establish your identity.

    It is recommended to anyone who’s considering instant loans to explore all other available options first. If none of the other options available (including asking family and friends, or even getting a second job) prove to be unfeasible, or work out more expensive, only then are borrowers advised to take instant loans. The interest rates are high, and so are the stakes.

    Some banks waive off processing fees and other additional charges. It’s important to choose the right combination of lender, approval time, interest rate, repayment schedule and loan amount in order to judiciously plan out your finances and make sure you aren’t making the wrong decision.

    This Page is BLOCKED as it is using Iframes.