Personal emergencies can drain you out mentally and financially. Therefore, it is highly recommended to have an emergency fund to fight challenging situations that demand money. However, most of us fail to save enough to tackle financial adversities, and we have to look for external financial aid. Seeking help from friends or family is not always a good idea. Getting a personal loan can help you overcome these challenging times without putting a strain on your finances. In the contemporary era, financial institutions are offering instant loans. These loans are processed and disbursed quite fast. If you apply with the best providers of an instant loan in India, it can be approved almost within a day. Read on to learn more about instant loans in India and how they can help you during emergencies.
What is an instant loan?
Instant loans are usually short-term loans characterised by low processing and disbursement timelines. Most instant loan amounts are relatively smaller and have a higher interest rate. However, one can get a competitive interest rate by applying for the best instant loan providers. A good credit score and repayment history can also work wonders for someone looking to get an instant loan in India. The loan is processed and disbursed within a day in most cases if the applicant meets the eligibility requirements.
Why should you take an instant loan?
An instant loan can be taken for a wide range of purposes. Most people take an instant loan due to some financial emergencies. Medical emergencies are a common reason why most people opt for an instant loan. However, there are other cases where an instant personal loan is the best choice for borrowers. Let’s take a quick look into some of instant loans’ most prominent use cases.
1. Medical emergencies
Medical emergencies can knock on our doors any time of the day, and most of us are not well-equipped to finance these emergency expenses. Taking an instant personal loan is a no brainer in this scenario. The COVID-19 pandemic showed us how medical expenses could drain us out financially. Even the people who had a good amount saved had to rely on loans to finance the costs. Medical emergencies are time-sensitive, and not being able to arrange the required amount within the given period can have dire consequences.
2. Debt consolidation
Another common reason why people take a personal loan is for debt consolidation. Debt consolidation can be defined as combining multiple debts into one and financing the small existing debt using this amount. It is used to repay a current high-cost debt by taking a big loan amount. It is an excellent way to manage high-cost consumer debts such as credit card bills. The interest charged on credit card bills is relatively high, which can add to the financial burden. To address high-cost debts like these, people take a relatively cheaper loan.
3. Loan without collateral
Most financial institutions ask the loan applicant to pledge collateral against the loan amount they are applying for. The collateral acts as a security for the loan offered to the applicant. It can be used to recover losses in case of default. Instant loans are unsecured loans, meaning it doesn’t require any collateral from the borrower. One can apply for an instant loan if they don’t want to pledge any asset as security against the loan amount.
4. Hope repair and renovation
Home repairs and renovation can be a costly affair and cause a dip in your savings. Home renovation doesn’t come under the emergency expenses category. However, there are some home repairs that fall under the same and could really put a dent in your savings, depending on the extent of the damage. One can easily opt for an instant loan to finance the same.
5. Emergency wedding expenses
Most Indian weddings are lavishly planned and incur a lot of expenses. At times, there can be some emergency spending that can add to the overall costs significantly. It can cause the expenses to go out of your budget. In this scenario, one can easily apply for an instant loan and manage the finances effectively.
Today, financial institutions are offering the flexibility to apply for instant loans online. However, applying for an instant loan online without documents can lead to rejection. You must have a digital copy of the required documents while submitting your application.