Instant loans are like financial superheroes, swooping in just when you need them the most. They’re the ultimate lifesaver for those expenses that catch us off guard, like home repair or any medical emergency. That said, the beauty of instant loans lies in their speed and convenience.
You can secure an instant loan from the convenience of your home within a few minutes. With digital and quick verification, you can get the funds you require sent directly into your account. No more standing in line for hours at the bank or completing mountains of paperwork.
Instant online loans are a quick solution to your financial hiccups, ensuring you can keep moving forward with your plans and aspirations. So, when life throws you a curveball, remember that instant loans are there to help you hit it out of the park!
Now, let us have a look at some common instant loan terms and jargon to understand how instant loans work.
Common Instant Loan Terms and Jargon
Instant loans have witnessed exponential growth in recent years due to their convenience and accessibility. If you seek to opt for instant loans, it becomes essential to understand the fundamental terms and jargon associated with them. Here are some of the common instant loan terms and jargon in India:
- EMI (Equated Monthly Installment): This is the fixed monthly payment that a borrower makes to repay the loan. It includes both the principal amount and interest.
- Principal Amount: It is the initial amount that you, as a borrower, borrow from the lender, which you need to repay.
- Interest Rate: The interest rate determines how much the cost of borrowing the loan will be paid in addition to the principal amount.
- Credit Score: It is a numerical representation of your creditworthiness. Lenders use this score to evaluate the risk associated with lending to an individual.
- Collateral: Loans like secured loans need you to promise assets as collateral to secure the loan. These may be your property, gold, or other securities.
- Unsecured Loan: Unlike secured loans, these loans require zero collateral. They are offered solely on the basis of your creditworthiness.
- KYC (Know Your Customer): This is a process that enables lenders to verify the identity and address of the borrower. It is done to prevent fraud and money laundering.
- CIBIL Score: Credit Information Bureau (India) Limited (CIBIL) is a body licensed by RBI. It provides credit scores to individuals based on their credit history and repayment behaviour.
- Prepayment Penalty: Some loans may have penalties for repaying the loan before the agreed-upon tenure. It’s essential to understand these charges before making early payments.
- Processing Fee: It is a one-time fee that the lender charges to process the application for an instant loan.
- Default: If you fail to repay the loan as per the agreed-upon terms, this can have a negative impact on your credit score. This failure puts you in the category of “Defaulters.”
- Foreclosure: It is the process of repaying the entire loan amount before the scheduled loan tenure.
- EMI Bounce: An EMI bounce occurs when a borrower fails to pay their instalment on the due date. It takes place when there are insufficient funds in the borrower’s account or due to technical glitches.
- Credit Limit: It is the maximum loan amount a borrower is eligible to borrow.
How Instant Loan Works?
Instant loans are unsecured, short-term loans. Their goal is to give borrowers speedy access to funds. These loans are also known as payday loans or cash advances. You can secure these loans to cover unexpected expenses or emergencies. However, you must repay these loans by your next paycheck. Now, let us look at how an instant loan typically works:
- Application: You can apply for an instant loan online, in person at a physical lender’s location, or via a mobile application. The application procedure is typically simple and requires your personal information, income evidence, and a legitimate checking account.
- Approval: Instant loans are known for their quick approval process. Online lenders quickly conduct a credit check based on your information and approve your application within minutes. However, proof of a steady source of income is typically the primary condition for acceptance.
- Loan Terms: Depending on your income, you are only permitted to borrow a specific amount of funds. It is essential to read all loan terms before applying.
- Repayment: Instant loans generally have a grace period of two to four weeks before becoming due on your subsequent payday. You are required to give the lender a check with a post-dated date on it or permit them to take the loan amount, fees, and interest directly from your bank account.
- Fees and Interest: These costs can soon mount up, making these loans an expensive option for obtaining funds. Because fast loans typically have very high annual percentage rates (APRs), it is crucial for you to comprehend the whole cost of the loan.
Get an Instant Personal Loan with the KreditBee Loan App
In a fast-paced world, the need for quick and hassle-free financial solutions is paramount. With straightforward terms and instant accessibility, this innovative approach to lending empowers individuals to meet their financial needs swiftly and efficiently.
Take advantage of the multiple loan apps, like KreditBee, that will help you secure your financial future. With our KreditBee Loan App, you can experience the convenience of instant loans up to Rs. 4 lakhs within minutes. With just a tap, you can take charge of your funds and create the road to a happier, less stressful future. Your financial security is only a tap away – connect with our executives today!