Quick Cash: Understanding Instant Personal Loan & Its Types
Let’s understand an instant personal loan– an unsecured loan approved and disbursed quickly, usually within a few hours or days of application. Instant personal loans are designed to provide borrowers with quick access to cash in case of an emergency or unexpected expenses.
Instant personal loans offer several benefits to both borrowers and lenders:
Benefits to Borrowers-
- Quick access to funds: Instant personal loans provide borrowers with quick access to funds, which can be used to address emergencies or unexpected expenses.
- No collateral required: Borrowers don’t need to provide any collateral to avail of instant personal loans, making it easier for them to access funds.
- Flexible repayment options: Lenders mostly offer flexible repayment options for instant personal loans, allowing borrowers to choose a repayment schedule that works for them. There is various loan app available for flexible payment.
- Minimal documentation: Instant personal loans require minimal documentation, which makes the application process quick and hassle-free.
- No usage restrictions: There are no restrictions on the usage of the loan amount, giving borrowers the flexibility to use the funds for any purpose.
Benefits to Lenders-
- Higher interest rates: Lenders can charge higher interest rates on instant personal loans, which helps them earn more profit.
- Lower risk: These loans are unsecured, so lenders can still recover their money even if the borrower defaults.
- Quick processing: Instant personal loans are processed quickly, which helps lenders save time and money on processing costs.
- Customer loyalty: By providing quick and hassle-free loans, lenders can build customer loyalty and increase the likelihood of repeat business.
There are several types of instant personal loans available, including:
- Payday loans: These are short-term loans typically repaid on the borrower’s next payday. Payday loans are usually offered in small amounts and have a high-interest rate.
- Line of credit: A loan allows the borrower to borrow money up to a pre-determined limit. The borrower can withdraw any amount up to the limit and only pay interest on the amount borrowed.
- Credit card cash advance: Credit cards can be used to obtain a cash advance. The borrower can withdraw cash from an ATM or a bank, and the amount is added to the credit card balance. Credit card cash advances usually have high-interest rates and fees.
- Installment loans: Installment loans are repaid over a fixed period in equal installments. These loans can be offered in larger amounts than payday loans and have a lower interest rate.
- A personal line of credit is similar to a line of credit, but the funds can be used for any purpose, not just emergencies.
- Online personal loans: Online personal loans are applied for and processed entirely online. These instant loans are usually offered by fintech companies and can be approved and disbursed quickly.
Overall, instant personal loans benefit both borrowers and lenders by providing quick access to funds, flexible repayment options, and minimal documentation, among other advantages. Their versatility is what makes them accessible to everybody.