A sudden financial crisis is unavoidable for anyone. Gathering funds to manage such circumstances could have been a challenge when there was no digital lending system. Today, the scenario is completely different. Technology has taken our lives to a whole new level. Getting a loan is possible within a few minutes from the moment you apply for it. Quick loan is a new phenomenon in the financial realm that has become very useful for multitudes to meet all sorts of monetary needs. Quick loans may come in the form of short-term loans, salary advance, line of credit, etc. You can choose the option that is suitable for your need just right from your mobile.
Quick loans are different from the traditional loans that are available with banks and financial institutions. The lending process is quick which involves an easy registration and verification. If you are eligible for a quick loan, the lender will immediately transfer the required funds into your bank account. You can repay the loan in comfortable terms that is already opted by you.
Along with the regular products, most banks in our country have started offering this product catering to the needs of varied borrowers. Apart from banks, one can avail quick loans from Non-Banking Financial Companies (NBFCs) and Peer-to-Peer lenders (P2P).
Applying for Quick Loans
Most of the quick loans have zero physical documentation, and it can be applied online just using your mobile phone. Though some of the banks provide quick loans, NBFCs and online lenders are the popular channels for availing quick loans.
By visiting the official website of the lender, you will be able to apply for the quick loan. You will have to enter your personal and income details for loan processing. The lender might ask you to upload the proofs online for verification, following which your loan will be approved or rejected.
Downloading the mobile application is another easy way to apply for quick loans. You need to download the app from Google Play Store or App Store and register yourself with your social media profile or by creating a new profile. After entering basic details such as address, PAN, bank details, photograph, etc., upload the valid documents. The app will review your request and the money will be disbursed to your bank account post approval.
Additional Reading: How To Get Quick Approval On Loans
Features of Quick Loans
When you need finance immediately in an emergency, quick loans come handy. Some of the salient features of quick loans are:
Registration Process: One needs to register with the lender to avail a quick loan. This process is easy and requires zero physical documentation in most cases. Personal, income, employment details and credit history are to be provided.
Quick Verification: Once you have registered with the lender expressing your interest to avail a quick loan, your details are verified immediately, and the loan is processed for approval.
No Collateral: Quick loans are typically unsecured loans, wherein you do not need to pledge any collateral to secure the loan.
Interest Rate: As quick loans are unsecured loans, the rate of interest will be higher, considering the risks involved in the lending process.
Tenure: Quick loans are generally shorter. The maximum repayment period could be up to 2 years, and the minimum is 1 month. You can choose the quick loan that offers a comfortable repayment period.
Benefits of Quick Loans
Quick loans are beneficial in times of need and meeting emergencies. Some of the major benefits of taking a quick loan are:
Speedy Disbursal: One can avail a quick loan in the matter of hours and get the money disbursed on the same day.
No Credit Check: Comparatively, most lenders do not require a credit check to be done of the applicant. It paves the way for first-time borrowers to access credit and build their credit in a positive way.
No Collateral: Quick loans do not require a collateral or hypothecation of asset. This makes it very easy to avail the loan.
Easy Online Application: Many lenders today have made the process of applying for a quick loan easier through online method. Less paperwork is involved.
Zero Physical documentation: There is a very minimal documentation required for taking a quick loan. The entire process is carried out online including the document verification.
Additional Reading: How to get quick loans with bad credit?
Eligibility Criteria for Quick Loans
Since quick loans are relatively easier to get, the eligibility criteria for availing such a loan is also simple. Depending on the type of quick loan being applied for, the general eligibility criteria are as follows:
Individual between the age of 21 to 60 years
Salaried or self-employed individuals
Minimum income requirement of Rs 15,000 per month in most cases
Employees of private companies, PSUs and central/state government
Good credit history in some cases
Mandatory bank account
Interest Rates and Other Charges on Quick Loans
Quick loans are normally more expensive than the traditional loans due to high interest rates. Since the loan is available in an unsecured format, the risk is higher for the lender. Hence, the interest rates on quick loans are higher.
The interest rate is normally decided based on the loan amount, income, employment, tenure and the credit history of the applicant. If the loan amount is higher, the rate of interest can be expected to be higher. If the credit worthiness of the applicant is not good, the rate of interest will automatically go up to the higher side. As an applicant, it is better to compare the offers from various lenders before applying for a quick loan. Most banks have a band of interest rates which varies from 11.50% to 22%.
While processing a quick loan, banks/lenders levy some charges while applying as well as during the course of the loan. An indicative list of the charges can be noted below:
Ranges between 2% to 3% of the loan amount
Ranges between 2% to 5% of the outstanding loan amount
|Loan Cancellation charge||
Nil to Rs. 3000/- varies from bank to bank
|Repayment Mode change||Rs 500/-|
|EMI Bounce charge||Rs. 400 to Rs. 550/- per bounce|
|Late payment charge||2% per month|
|Amortization schedule change||Rs. 200/-|
The above rates and charges may differ from lender to lender based on their internal policies. For the exact charges, you need to get in touch with the lenders.
Should you take a quick loan?
A quick loan gets you the access to funds instantly within a day. Though a secured loan is cheaper than a quick loan, it is the best solution when you need instant funds as a secured credit would take more time in processing and approval. Quick loan lets you take minimum amount as loan which may not have been possible if you opt for a personal or secured loan.
Additional Reading: Is Quick Loans a good choice?