The popularity of instant personal loans has risen in recent years due to their ease of access, quick disbursal and minimal documentation. These loans are useful for people who need funds instantly, such as for medical emergencies or any other personal needs.
However, acquiring an instant loan without CIBIL can be challenging and tricky. Here is an article so that you can understand everything about how you can obtain an instant personal loan.
Understanding Instant Personal Loans
Unsecured loans that are approved in a short time (ranging from a few hours to a few days) and used for various purposes are known as instant personal loans. They are accessible to many since they need no collateral.
This type of loan is offered by banks, non-banking financial institutes (NBFCs), and digital lenders and is designed to meet urgent financial needs such as medical emergencies, house renovations or other personal needs.
Getting an Instant Personal Loan Without CIBIL Score
For any lender, a person’s CIBIL score matters a lot since it gives them an idea of your credit history and repayment behaviour. However, it is possible to obtain a personal loan while having a low or no CIBIL score. Let us look into a few ways in which it is possible.
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NBFCs and Digital Lenders
Various financial institutes and NBFCs offer personal loans without deeply looking into CIBIL scores. Instead, they approve loans based on your income, employment stability, and your capacity to repay the loan within the agreed time.
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Stable Income Source and Credible Employment History
Lenders are more likely to approve your loan if you are employed at a reputable organisation and can demonstrate your stable income. You can prove your financial stability by submitting documents such as bank statements, salary slips, or income tax returns.
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Co-applicant or Guarantor
If you don’t meet the credit requirement, having a co-applicant or guarantor who has a good credit history can be helpful. In this case, instead of considering your low or non-existent score, the lender will also consider the co-applicant’s financial status and creditworthiness.
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Higher Interest Rates
The drawback of having a low credit score is higher interest rates. This is because lenders seem to balance the risk of approving the loan with higher rates. Getting a loan should not be an issue if you are comfortable with slightly higher rates.
Documentation Required for an Instant Personal Loan
Once you have figured out a way to overcome the problem of ‘low CIBIL score’, you then have to gather the necessary documents. Even though these loans require minimal documents, you’ll still need to submit the below-mentioned documents.
- Identity proof (Adhaar card, passport, or voter ID)
- Address proof (rental agreement, electricity, gas or water bills),
- Income proof (salary slips, bank statements, or income tax returns), and
- PAN card.
Once your identity, living arrangement, stable income and financial strength are verified, the lenders will then process further steps.
Benefits of Instant Personal Loan
Instant personal loans are quite helpful as they provide easy access to funds. Here are some of the key advantages of taking an instant personal loan.
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Low Approval Time
The most important benefit of instant loans is the short approval time. The quick approval and fund disbursal make instant personal loans valuable and attractive.
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Collateral Free Loans
Unsecured loans do not require the borrower to pledge property or other assets. Most lenders offer instant personal loans that are often unsecured.
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Convenient Application Process
Convenience is a major factor in loans. During an emergency, visiting a financial institution is difficult. In such a situation, it is important to have a convenient way that allows you to secure a loan in the comfort of your house via various apps and websites.
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Flexible Use of Funds
Once the funds are disbursed into your account, you can fulfil any of your needs with that amount. For eg. an instant loan can be used for a medical emergency, marriage, house renovation, other loan payoffs etc.
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Minimal Paperwork
Arranging the necessary paperwork during a personal emergency is inconvenient. Thus having the convenience of getting a loan approved with minimal documentation is helpful.
Conclusion
Getting an instant personal loan is an optimal solution for individuals seeking quick funds during emergencies. You can apply for personal loans even though you have a low CIBIL score with banks or NBFCs by providing income proof and applying with a co-applicant. Before taking loans, understand the repayment terms and use digital tools to compare various benefits. You can take advantage of instant loans by understanding their fundamentals and carefully planning your finances.