FAQs A Salaried Person Must Be Aware Of Before Applying For An Instant Loan

Is there a medical emergency back at your home? Do you need some instant funds? What are the Fintech companies there for? Tap your smartphone, and the funds will be readily available in your account. It is applicable whenever there is an emergency and your wallet is empty. Such digital loans indeed act like supersavers, but there are some crucial FAQs that you (a salaried individual) must be aware of before borrowing.

1. What is meant by an instant loan?

An instant loan is a same-day loan you receive upon providing an online application. It is a kind of digital, paperless transaction primarily offered by Fintech companies in India. A mobile app or a website is enough to execute the process. You do not need to keep gold or property as a security deposit for this.

2. Do I need to submit any documents?

Though the procedure does not require many papers, as a salaried person, you will have to submit some documents, such as the following:

• Current salary slips (maybe of the last 2-3 months).

• Aadhar and PAN card.

• An ID card of your company or an employment letter.

• Bank statements as proof of salary credited. 

There are various other digital methods that many financial companies follow to confirm your creditworthiness. In such cases, your documentation burden may be less.

3. How will I know if I am eligible to apply for the loan?

Though the eligibility varies depending on the lenders, the criteria generally followed are,

• You must have Indian citizenship.

• Your age must be above 21 and between 60 years.

• You must be a salaried employee of an authenticated company.

• Your credit score must be above 700, preferably.

• Your income must be stable.\

4. Is there any extra charge?

Before applying, read the terms and conditions carefully. Some frequent charges are:

• Fees for processing the loan

• GST on the fees and interest amount

• Penalty for late or failed payments

5. Will my data remain secure?

While finalizing the lender from whom you will borrow the money, always go for an RBI-registered company. They must also follow the standard data protection protocols. To know that, read their privacy policy and look for SSL encryption on their website. Reputable companies follow all these rules.

6. What will happen if I fail to repay the amount?

Defaulting on payment may lead to serious problems that may affect your credit score. Some disasters that may happen are,

• The lender may report to credit bureaus negatively.

• You may stumble upon legal disputes in severe cases.

• Another loan may not be available in the future.

• Interest rates will increase with additional charges as a punishment.

7. What options are available for repayment?

Generally, these instant loans come with flexible and affordable repayment plans, offering adequate time, for example, 3-5 years. You can go for:

• EMIs.

• Scheduled payment according to your salary credit dates.

• Pay-as-you-use credit lines.

You must have become aware of the pros and cons of an instant loan by now. First, know your actual need and capacity to repay. Study the offers of different lenders, read customer reviews, and learn more about your lender’s authenticity, and only then click the ‘apply’ button. Always remember that such loans are for emergencies only, not for spending on lifestyle expenses that you cannot afford. So, maintain a healthy credit profile.