We live in a world where if you are not part of the digital world, you are not a part at all. We want everything at the tip of our fingers and we get upset if we don’t get it instantly. There are so many banks that are providing their customers with instant loans.
With most banks providing instant loans, the entire process of loan approval, as well as the turnaround time, has changed drastically. But just because a bank is offering you an instant loan doesn’t mean you take it up. Banks offer loans to grow their business but taking a personal loan when you really don’t need one makes no sense.
Loans That are Given by Financial Institutions:
There are only two ways by which a bank can provide you loan online, it will either be on the company’s website or it will be on their mobile app. With this fad catching up with people, banks have seen a major increase in the online loans. It is predicted that more than 50% of the loans will happen online in the near future.
But loan approval doesn’t necessarily mean that your entire loan is approved. Instant loan approvals are usually given for personal loans since a personal loan needs lesser documentation as compared to other types of loans.
If you opt for a secured loan then the bank has collaterals such as your house, your car, your gold jewelry or even your fixed deposits for that matter. Banks need collaterals so if you default on your payments in during the tenure of the loan, your collated item will be seized by the bank. This item will be used by the bank to recover their loan amount. If you opt for an unsecured loan, the bank will solely rely on your credit history and your income statements.
Your instant loan application will be approved only if you have an existing account with the bank. When you open an account with the bank, they will already have the important documents like your credit history and income statement.
Loans That are Given by Non-Banking Financial Companies:
There are a few Non-Banking Financial Companies (NBFCs) that allow their customers to take loans on mobile applications. These banks are only providing personal loans and business loans for now. If you want to get this type of loan you need to provide some sort of documentation to the bank like your Permanent Account Number (PAN) details and your income statements.
Since you do not have any sort of account with these companies, they also need to know about your credit history and your CIBIL score. CIBIL is a bureau in India which keeps a record of your financial history and passes it along to financial institution and lenders whenever needed. If you have a good CIBIL score, your loan will get approved instantly.
If you fit the eligibility criteria for personal loan set by the bank, your loan will be accepted immediately, if not your application will be rejected. The process for your loan approval is very simple. Once your application is accepted someone from the bank will call you and the disbursal of your loan will take 2-3 days.
Non-Banking Financial Companies usually provide only short-term loans and the amount of rate of interest that you have to pay is also higher as opposed to the rate of interest that you get when you take a loan from banks. You will need to pay a small processing fee that is charged by both the bank as well as non-banking financial institutions.