What if one is in an emergency and needs some money quickly? In that case, small loans are the best possible solution. They are comparatively easily attainable loans provided for urgent money requirements. These loans are ‘small’ because they deal with smaller amounts, which depends on the lender. Unlike home loans, educational loans and vehicle loans, these loans are not for specific purposes. They are personal loans that can be useful for any immediate purpose like renovations or special occasions like an anniversary or birthday party. According to borrower’s necessity, it can be helpful for any purpose as it is a personal loan. Some of the best private lenders provide the best services for clients who need small amounts.
Personal Loans vs Small Loans
Compare to a personal loans Interest rate is less for small loans. Due less amount Small loans offers shorter tenure. Normally we need a small loan for Debt consolidation, As a alternative to payday loans, Moving costs, Emergency expenses, Wedding expenses, home renovations, car repairs, and Vacation. Some of the alternatives of Small loan are Credit cards and Home equity loans.
Why Should One Go for Small Loans?
1. Processing is effortless
Applying and processing these loans is comparatively more straightforward and effortless, like applying for regular personal loans. Sometimes, the borrower will be in an emergency requirement with an additional need for a small amount. In such cases, these mini loans are highly effective and helpful. For unforeseen problems, like hospital emergencies and if one doesn’t have much savings to pay the bill, these plans will serve the purpose. Most of the lenders provide their services online to make the money lending process much easier and comfortable. The involvement of internet banking facilitates the direct bank transfers of the loan and repayment without much delay and confusion, reducing the procedures for making the bank statements and other paperwork. Thus the application and processing turn out to be much effortless.
2. Same Day Approval
Due to quicker approval process Small loans are suitable for financial emergency. They deal with small amounts and process for a short period. Usually, most of the lenders provide a maximum of 6 months of repayment tenure. It may vary according to the lender, as does the maximum loan amount. The money lenders will generally provide the option for the borrower to choose the term of the loan. As the loan amount is small, one can decide the repayment period and the specific amount each month.
3. Minimum Income requirements
It requires small amounts as fees and minimum income requirements from the part of the borrower. Most of the lenders make their services transparent, and thus the borrower can decide whether to choose that particular lender by going through their terms and conditions. For a small loan your monthly regular income should be at least 8,000 Indian Rupees. Normally for small loans approval we don’t need to pay any hidden charge to the bank.
4. Good Credit history
A regular recurring income is necessary for the borrower to apply for the loan. Be it an income from a job or any other steady income, including government payments, the source of income is relevant. While going through the credit checking process, the lender will consider the one with a pretty good credit history. Financially its healthy to maintain your Credit Score above 750. If your Cedit Score is less then 685 it is much difficult to find a loan from banks or NBFCs. The borrower should have a regular income source to apply for the loan more than anything else.
5. Minimal Documentation
Compare to a personal loan or a home loan small loans required less documents. Basic details like PAN Card, AADHAR Card, Residential proof, Passport size photographs and Bank Statements are enough to apply a small loan. Small loans often come with lower interest rates than credit cards. If you are applying for a small loan as a business owner you have to show minimum 2 yrs income tax return.
6. Personal Information Security
Moneylenders promise the confidentiality of the details as they make the procedures more and more transparent. It doesn’t involve a third party’s presence, which adds to personal information security.
For those who have urgent money requirements for small amounts, small loans are the best solution. To apply a small loan your age must need to 21+ years. Reliability and easy processing will make it much convenient. Be it an emergency, including payment of bills or unexpected emergencies; One can surely go for these mini personal loans without hesitation.
