Banking, Loans, Personal loan

Instant Personal Loan Impact on CIBIL, Pros Cons

Posted By: Admin
September 5, 2022 |

Do Instant Personal Loans affect your CIBIL? Is it beneficial to avail an instant personal loan?

Instant Personal Loan: As the term indicates, Instant personal loan is a fast and easy personal loans option, which many of the lenders including banks are providing to users. Quick personal loans can help you when you need funds urgently and do not want to borrow from people you know. There are many small finance companies which are providing instant personal loans to their existing customers as well as new customers. Technology is boon to such companies as the loans are available on company specific apps like Bharat Pe, Phone Pe etc. Almost all banks in India have started providing quick loans. These loans are easy fast cash loans which a user can avail within seconds. The mobile apps are running campaigns to attract customers. If I name some of the campaigns like instant paytm loan, jio instant loan, kreditbee instant loan, lazypay instant loan and many others.

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Why do lenders provide instant personal loans?

The instant personal loan is the easiest and quick way to grab a customer too without wasting manpower. The companies need not open physical branches to distribute these loans. Since quick personal loan credits in the account directly, the company can disburse it through UPI or online mode. Many lenders ask you very few details when you opt for a quick cash loan. Due to which the lenders do not worry about physical documentations and ECS/ NACH registration. Instant personal loans save time and cost involved in loan distribution. Another aspect is, the lender can reach a customer who is located in a remote area. Hence Instant personal loans are quick and easy personal loans.

Benefit of Instant personal loan to a borrower

There are many benefits of instant personal loan which include less or no documentation, easy disbursal, no personal visit to bank, hassle free processing and much more. let’s discuss this in detail below –

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Reason for personal loan rejection

Instant personal loans are granted as when required. There is no need to submit an application or call to a bank or Non banking financial company (NBFC) to avail these loans. The concept of the loan is designed to cater to the urgent need of funds. Get a personal loan instantly in minutes.
Less interest rate on instant loans. The competition in this segment is growing rapidly and many new players are offering quick loans instantly through mobile apps. This competition is encouraging the lenders to provide loans at less interest rates. Just like credit card loans, the instant loans are also available on no cost EMI option in some NBFCs.
Fast and easy personal loan processing. As users can apply for instant personal loans through online banking or company specific mobile apps, there is no need to submit documents and wait for the processing of the loan. It’s a really quick and amazing option in need of money.
Improve credit score. The loans are available by just submitting your minimum KYC documents online. When a user applies for a personal loan, instant approval is given by lenders. Lenders provide these loans without relying on your credit score. The instant loan eligibility is based on your financial history. Quick loans against salary is the method which lenders mostly follow. Lenders also provide fast loans against pension, hence pensioners can get the benefit of the scheme.

Impact of instant personal loan of CIBIL

Since this loan is so easy to access and easy to avail, many people are applying for loans without having a requirement of funds or very frequently which hampers your credit worthiness. Let’s see the impact of your credit score in detail.

Positive Impact of quick loan on CIBIL –

These loans are helpful in improving your CIBIL score. Many lenders like PayTM, PhonePe, MobiKwik, RazorPay, Bharat Pe provide instant loans based on your financial transaction but for less amount. The loan amount can be up to 1 Lakh depending on your eligibility. Since the amount is less it is easier to repay. You can repay an instant personal loan in 10 or 12 installments. The regular payment of the loan, heal your bad credit score and improve your CIBIL.

Negative Impact of quick loan on CIBIL –

As discussed above, the lenders are canvassing the instant loans so aggressively that in every 5 messages you may receive one message related to instant loan. Instant loan on a click is the tagline of many ad campaigns. This may mislead a customer and he ends up availing the loan. Availing many loans in a short span and applying instant loans very frequently may indicate to the lender that your finances are in poor condition. The frequent applications may appear in the credit sheet, which will be badly affected by doing this.

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Things to keep in mind while applying for fast loan

Here I will suggest some important things, which you should follow before and after availing a quick loan.

Do not get overburdened by EMIs – One should always keep the repayment capacity in consent while applying for a loan. The loan can be availed but if you miss any instalment or delay an EMI, it may ruin your credit history.
Decide the amount which you want to avail as instant loan – Before availing a loan, do not just opt for the maximum amount the lender is offering to you. Always fix an amount of loan which you need to avail. Following this, will certainly help you to be financially strong.
Apply for a loan when you are really in need – Don’t just avail a loan because it is easily available. The lender will charge you interest on the loan. Sometimes when we avail loans from less trusted lenders, the lender may charge a higher rate of interest.

Instant loan Campaigns of reputed lenders-

You can click on the link to go to official websites.

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