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About Quick Loans

As the term itself suggests, Quick Loans are available within a few hours of application and helps in settling financial crisis. It is different from the traditional loans that are available with banks and financial institutions. Most lenders have an easy registration process wherein your basic details are requested and verified. The verification process is completed in no time to ensure money is disbursed. If you are eligible for a quick loan, the lender will immediately transfer the required funds into your account.

Many banks in our country have started offering this product along with the regular loan products. Apart from banks, one can avail this loan from Non-Banking Financial Companies (NBFCs) and Peer-to-Peer lenders (P2P).

Quick Loans have started to gain popularity over the long-term loan products as it is faster and more flexible according to one’s financial requirement. The turnaround time from application to disbursement of money makes it a preferable option in times of emergencies.

Quick Loans
Quick Loans

Purpose of Quick Loans

Quick Loans help in plugging your immediate financial requirement or an emergency in a speedy manner. It mainly services the purpose of quick financial assistance as compared to a long-term loan or an overdraft facility. There are different types of Quick Loans that serve different purposes which are briefly mentioned below:

Personal Quick Loan :

A personal quick loan is an unsecured type of loan which requires very minimal documentation. Some of these loans are available within hours of application and funds are disbursed on the same day itself. Some lenders have the option of applying for this loan online and easy approval process ensures quick turnaround. Any salaried, self-employed resident of India can apply for this loan. The interest rate is decided by the bank or the lender and mostly depends on the amount of loan taken.

Credit Card Loan :

One can avail pre-approved loan on their credit card with attractive interest rates. Many a times, this type of loan is called as Insta Loan. Since the loan is approved on the basis of your credit card, it requires minimal documentation and approval can be sought within hours. The basic eligibility criteria to avail this loan is to own a credit card, maintain a good repayment history and sometimes an upgrade of the credit card is required. One can work out flexible repayment tenure for this type of loan.

Quick No Credit Loan :

A quick no credit loan is very useful for an applicant who does not have a good credit history. The loan can be approved in few hours and funds disbursed on the same day which services the propose of fast money. However, this type of loan attracts high interest rate and is of short-term duration.

Features of Quick Loans

When you need finance immediately in an emergency, Quick Loans come handy. Some of the salient features of Quick Loans have been mentioned below:

  • Registration Process :

    One needs to register with the lender to avail a quick loan. This process is very easy and requires bare minimum documentation. Personal details, income source, employment details and credit history are to be provided.

  • Immediate Verification :

    Once you have registered with the lender expressing your interest to avail a Quick Loan, the lender verifies your details immediately. This process is completed very quickly for a speedy disbursement.

  • Quick Transfer of funds :

    Once your documentation is in place, it takes no time to transfer the funds into your account. It is suggested that the interest rate and the repayment tenure should be agreed upon before this final step to avoid any discrepancies that could cost a lot more.

  • Online Application :

    Many reputed lenders offer an option of applying online for Quick Loans. This helps in cutting down paperwork and faster process of availing the loan.

  • Unsecured loans :

    Quick loans are typically unsecured loans which means the lender does not insist on a collateral. However, in case the lender asks for a security by means of pledging an asset like car, jewellery, land etc, it will have a positive impact on the interest rate negotiated as the lender’s risk reduces.

  • Insurance :

    Some banks offer personal accident cover and other insurance schemes on this loan product at very nominal premium rates. The premium gets deducted from the loan disbursal amount and does not affect your outflow much.

Eligibility Criteria

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 is as follows:

  • Individual between the age of 21 and 60 years
  • Salaried or Self-Employed
  • Should be a resident of India
  • Minimum income requirement of Rs 15,000 per month in most cases
  • Employees of private companies, PSUs and central/state government
  • Some lenders insist on good credit history
  • Some banks insist on having a bank account

Benefits of Quick Loan

Quick loans are beneficial in times of need and meeting emergencies. Some of the major benefits of taking a quick loan are:

  • Speedy transaction :

    One can avail a quick loan in matter of hours and get the money disbursed on the same day. The speed at which funds can be availed is unparalleled.

  • Credit History :

    Comparatively, most lenders do not require a credit check to be done of the applicant.

  • Unsecured Loan :

    Quick loans do not require a collateral or hypothecation of asset. This makes it very easy to avail the loan.

  • Online Application :

    Many lenders today have made the process of applying for a quick loan easier through online method. Less paperwork is involved.

  • Less documentation :

    There is a very minimum documentation required for taking a Quick Loan.

  • Non-customers :

    It is not mandatory for the applicant to have been a customer of the bank or the financial institution before applying for the quick loan. This makes the product accessible to all without much hassle.

Interest rates and Other Charges

Quick Loans are normally more expensive than the regular loans due to high interest rates. Since the loan is available in an unsecured format, the risk involved is higher for the lender. Hence, the interest rates available on Quick Loans are higher and therefore, makes it more expensive.

The interest rate is normally decided on the basis of the loan amount, repayment 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 suggested to compare the offers from various lenders before applying for a quick loan. Most banks have a band of interest rates which varies from 11.5% 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:

Processing chargeVaries from 2% to 3% with various lenders
Prepayment chargeVaries from 2% to 5% depending the principal amount remaining
Loan Cancellation chargeNil to Rs. 3000/- varies from bank to bank
Repayment Mode changeRs 500/-
EMI Bounce chargeRs.400 to Rs. 550/- per Bounce
Late payment charge2% per month
Amortization schedule changeRs.200/-

*It is important to note there that the above-mentioned charges are indicative and will vary from lender to lender. You are advised to check with the lender directly at the time of loan application for updated details.

How to Apply for a Quick Loan

One can mainly apply for a quick loan from banks, NBFCs or P2Ps. This can be done online which is faster and involves less paperwork. It is also possible to visit these institutions personally and submit your documents for a quick turnaround time.

It is also important to check the type of quick loan that you may want to apply. This depends on the amount of loan to be taken. If the loan amount is on the higher side, it will be more prudent to take a personal loan. If the loan amount is less, it is better to avail a loan on your credit card.

Top Banks that offer Quick Loans

Most of the top banks in the country offer Quick Loans today. The popularity of availing a quick loan has only increased. Some of the popular banks/lenders (in no particular order) that offer Quick Loans are:

  • ICICI Bank
  • Kotak Mahindra Bank
  • Citibank
  • Bajaj Finserv
  • Bank of Baroda
  • Standard Chartered Bank
  • State Bank of India
  • Axis Bank
  • HDFC Bank
  • Tata Capital

The above list of banks/lenders offer competitive interest rates and offer Quick Loans at attractive terms and conditions. However, one must check the currently prevailing details of the bank before applying for a personal loan.

FAQs

1. How can I repay the quick loan taken?

This can be done in many ways.

  • The loan can be repaid through EMIs (Equated Monthly Instalments). Post dated cheques needs to be submitted.
  • A standing instruction can be given to the bank to deduct the EMIs from your account on a monthly basis.

2. Is it possible to foreclose or prepay the quick loan?

Yes, most banks offer this option to foreclose your loan before the tenure ends. However, there could be some additional charges levied by the bank.

3. How much amount can I borrow with a quick loan?

The amount of loan is decided by the bank on the basis of your income, credit history and other liabilities that you may have. This needs to be discussed with the bank representative at the bank of your choice.

4. What is the loan tenure for this type of loan?

Most of the lenders offer a tenure period ranging between 12 and 60 months.

5. Is there any specification on the money that can be used under the quick loan?

No, the lenders do not have any restriction on the usage of funds taken under the quick loan scheme.

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