Guide to Instant Loans in India: What are the Top 5 Ways to Get a Quick Loan?

Anne E. Evans

Financial planning is a must in everyone’s life. Irrespective of your income, you need solid budgeting and a sound savings plan to take care of unexpected contingencies. Even if not an emergency, every one of us has a lot of financial responsibilities like marriage expenses, vacation plans, insurance policies, parents’ […]

Financial planning is a must in everyone’s life. Irrespective of your income, you need solid budgeting and a sound savings plan to take care of unexpected contingencies. Even if not an emergency, every one of us has a lot of financial responsibilities like marriage expenses, vacation plans, insurance policies, parents’ well-being and many more. People seek out saving instruments like FDs, RDs, Mutual Funds, Stocks & Shares, and more to manage their money and earn attractive returns. 

In spite of prudent planning, one may be faced with an urgent need for funds. Though there are various loan products available with banks and NBFCs, 

How does one decide which loan suits our needs the best? 

Also, which is the quickest loan option? 

What are the top 5 options to get immediate funds? 

These are questions that need to be answered before you click ‘Apply’ on that application form. 

Top 5 Instant Loan Options in India

To make it simple for you, loan experts from CreditMantri walk you through the top 5 instant loan options in India to get funds quickly. 

  1. Personal Loans

They top the list of instant loans. The major benefit of personal loans is the high loan amount at a lower turnaround time. These days, personal loans are disbursed within hours of submitting the application. They are mostly based on your income and credit score and hence can get you high loan amounts to meet your needs. 

Another benefit of personal loans is that there is no restriction on the end-use of the loan amount. Personal loans come in handy during weddings, higher education, vacation plans, home improvement, buying expensive gadgets or appliances for the house, etc. Personal loans can be availed by both salaried and self-employed individuals. A number of banks and NBFCs offer personal loans to individuals and business entities. 

  1. Cash Advance On Your Credit Card

Everyone owns a credit card these days. But, do you know that you can withdraw cash with your credit card at an ATM to meet emergency cash needs? 

Every credit card has a credit limit and cash limit. The cardholder can withdraw cash up to the cash limit on their cards. It is one of the quickest ways to get immediate funds. However, this comes with high-interest rates. If you don’t repay the amount in your next bill, you incur interest charges and other related charges which may prove to be very expensive. 

  1. Salary Day Loans 

This is a recent development in the finance market; Salary Day Loans. Salary Day loans are small, unsecured short-term cash loans that people borrow to get through the month before their next salary is credited. Here a small amount is being lent, often at a very high-interest rate.

Salary Day Loans or Payday loans are intended for the salaried people, who have difficulties in making ends meet, and find themselves with no cash to spare at the end of the month. Depending on the loan provider, these loans must be repaid within 7 to 60 days. This short-term, immediate nature of the loan and the possibility of repayment makes the loan very expensive. Payday loans come in handy during urgent needs like payment of school fees or medical emergencies. 

  1. Instant Loan Apps

There has been quite an exodus of ‘Instant Loan’ Apps in recent times. These loan apps offer you instant loans based on your salary. They are processed in minutes and the amount is credited to your account instantly. They offer various benefits like daily interest charges & anytime repayment without any penalty. 

The only difference between instant loans and personal loans is the loan amount. Instant loans offer a lower amount of loan as compared to personal loans. Also, since these instant loan apps are not properly regulated, you may end up getting trapped by high-interest rates and unfavourable loan terms. It is thus important to seek qualified and certified loan apps to prevent an unpleasant experience. 

  1. Loan Against your Investments

People do invest their hard-earned money in various instruments like PPF, FDs, Securities and Bonds. Though these instruments are created with the idea of using them during emergencies, breaking them midway may cause you considerable loss in returns. In such cases, one may use these instruments as collateral to get loans from a bank or NBFC. 

Financial institutions do offer term loans against your PPF investment, LIC Policy, Securities Investments, Government Bonds and even Bank FDs. If you have a considerable amount of investment in either of these instruments, you can pledge those certificates as collateral and get term loans up to a certain percentage of the investment value. These loans come with attractive interest rates and are quite affordable in times of needs. 

Snapshot of the Various Options available to get Quick Loans

Loan FeaturePersonal LoanCash advance on credit cardSalary Day LoansInstant Loan AppsLoans against your investments
Disbursal TimeWithin a dayInstantWithin hoursWithin minutesA few business days
Loan AmountHigh: Based on your salaryModerate: Limit specified on your credit cardModerate: Based on your salary and spending habitsLow: Based on your salary and spending habitsModerate: Depends on the value of your investment
Interest Rate10% – 24% per annum15% – 40% per annum1% – 5% per day1% – 30% per day8% – 15% per annum
Quantum Of LoanUp to Rs.50 lakhsUp to Rs.20 lakhsUp to Rs. 1 lakhUp to Rs. 1 lakhUp to 90% of your investment value

Final Thoughts

A loan is a financial commitment. Though we all prefer to manage our needs without having to borrow, some urgent needs require borrowing from banks and other financial institutions. While borrowing, one should carefully gauge the important factors to avoid any unpleasant experiences. 

While instant loan apps and salary day loans look lucrative, they may lead to bigger debt woes if not managed smartly. Make sure to compare the pros and cons of each type of instant loans and choose the right one that best fits your financial situation. Also, keep in mind that the loan amount should be only to meet the needs and not to indulge in luxuries and unnecessary spending. Never borrow over and beyond your repayment capacity!

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