Small Credit Loan Apps 2023: Instant Loan Apps in India

We often need money to meet our financial needs, in such cases Non-banking Financial Companies (NBFCs) help us a lot. You will find many such Small Credit Loan apps online, through which you get Instant small loans with just a few documents.

Instant Loan apps allow you to borrow money for short periods, usually until your next paycheck. They are designed to help you with immediate cash needs, such as paying bills, buying groceries, or covering medical expenses.

Here, you will get detailed information about the features, benefits, and charges of instant small credit loan apps.

Small Credit Loan Apps Review

Interest RateCompetitive Interest rate starting from 16% per annum.
Loan AmountRs 3,000 to Rs 3 lakhs
Tenure62 days to 36 Months
Processing FeeThe processing fee starts from 3% on the approval loan amount.
AgeMinimum Age Required 18 years.
LenderNon-Banking Financial Companies (NBFCs)

What do you understand by Small Credit Loan Apps?

Before applying for a loan, you will have to understand the definition of Instant small loan apps.

Small Credit Loan Apps is a mobile application that gives you a small personal loan without guarantee for a limited time, which you have to repay with interest in a few months. Most people also know them by the name of payday loans, cash advances, short-term loans, or NBFCs Personal loans.

You will find many RBI-registered apps on the internet that provide you with instant personal loans.

You can use the loan amount at your convenience, like credit card bill payment, rent payment, education fees, etc.

These apps’ interest rates and fees are usually higher than those of traditional banks or credit cards. If you fail to repay the loan on time, you may incur additional charges, penalties, or legal action.

Therefore, before using any small credit loan app, you should do your research and compare the available options. By reading the terms and conditions carefully and understanding the risks involved, you should borrow only what you need and can comfortably repay.

Instant loan apps prop and cons

Prop of Instant Small Loan Apps

  1. Digital process: Small credit loans are usually available online or through mobile apps, and the application process is fully digital, simple, and fast.
  2. Fast approval and funding: Instant Small loans are designed to provide quick access to cash, so the approval and funding process is usually very fast. You may get an instant decision on your application, and if approved, you may receive the funds in your bank account within hours or the next business day.
  3. Flexible repayment: Instant Personal Loans typically have flexible repayment options, such as weekly, fortnightly, or monthly payments. You may also be able to choose the repayment term that suits your budget and needs, as long as it does not exceed the maximum limit set by the lender.

Cons of Small Credit Loan Apps

  1. High-interest rates and fees: Small credit loans are considered high-risk loans by lenders. The interest rate may vary depending on the lender, loan amount, loan tenure, and credit score, but it can range from 10% to 48% per annum.
  2. Debt Trap: Small credit loans can be a debt trap if you borrow more than your ability to repay if you roll over your loan multiple times.
  3. Unregulated Lenders: Some Small loan providers are not regulated by the government or any financial authority, so they may not follow rules and standards that protect consumers.

Small Credit Loan Apps Interest Rate

The interest rate of an instant loan depends on the customer’s profile, CIBIL score, income source, etc. If a person needs an urgent small credit loan, he can apply for a loan from a non-banking financial company, which the company will transfer to the customer’s bank account within a few hours.

But before applying for a loan, it is necessary to know that the interest rate charged on such loans can be higher than that of bank loans and credit cards. Generally, the interest rate on instant personal loans ranges between 16% to 42% per annum. Therefore, the customer should apply for this type of loan at his discretion.

Factors Affecting the Interest Rate of Instant Loan Apps in India

The interest rate on instant loans is the cost of borrowing money from a lender. It is usually expressed as a percentage of the loan amount and varies depending on various factors. Some of the common factors affecting the interest rate of instant loans are:

Credit Score: A higher credit score generally results in lower interest rates, as it indicates a lower credit risk to the lender. A credit score is a numerical representation of your credit history and repayment behavior.

It ranges from 300 to 900, with higher scores indicating better creditworthiness. You can improve your credit score by paying your bills on time, maintaining a low credit utilization ratio, and avoiding multiple loan inquiries.

Loan amount: Larger loan amounts may carry lower interest rates, as lenders often view these loans as less risky. This is because larger loans mean that the income and repayment capacity of the borrower is higher.

However, this may also depend on the lender’s policies and the type of loan. Some lenders may charge higher interest rates for larger loans to cover their risk.

Loan Tenure: Interest rates may be higher on longer loan tenures due to increased risk for the lender. This is because a longer term means the borrower will pay more interest over time and may face more uncertainty in their financial situation.

Shorter loan periods may have lower interest rates, as they reduce the risk for lenders and allow them to recover their money faster.

Income: Your income is another factor affecting your interest rate, reflecting your ability to repay the loan. Candidates with higher incomes are considered more reliable and stable by lenders and may get lower interest rates.

Your income also determines your eligibility for the loan amount and tenure you want.

Type of employment: Your type of employment also affects your interest rate, as it indicates the security and stability of your job. Lenders prefer borrowers with a regular and stable source of income, such as salaried employees or self-employed professionals.

Government and private sector employees may get lower interest rates than business owners or freelancers, who may face greater fluctuations in their income.

Relationship with the lender: If you have a loyal relationship with the lender, you may be able to negotiate a lower interest rate for your instant loan. Lenders value their existing customers and can offer them better deals and discounts.

You can take advantage of your relationship with the lender by maintaining a good repayment history, using their other products and services, or referring other customers to them.

Market Conditions: Market conditions also affect the interest rate on term loans, as they reflect the demand and supply of loans in the economy. Inflation, recession, repo rates, and other factors affect the cost of borrowing money from a lender.

When there is inflation, lenders offer higher interest rates instead of lower rates during a recession. Lower repo rates also translate into lower interest rates.

Eligibility Criteria of Small Credit Loan Apps

Eligibility criteria for personal loans may vary depending on the lender, but there are some standard requirements:

  • Applicant must be a resident of India.
  • The applicant’s age should be between 18 to 60 years at the time of application.
  • The minimum monthly income of the applicant is Rs. Rs.15,000 or more depending on the loan amount and tenure.
  • Must have a steady source of income and a good repayment history.

Documents Required for Instant Small Credit Loan Apps in India

To avail of an Instant personal loan, you need to provide the necessary documents, but due to a low credit score, some additional documents may be required, which are mentioned below.

  1. Pan Card
  2. Aadhar Card Should be linked with a Mobile Number.
  3. Address Proof: Any one of the documents – Passport, Aadhar Card, Voter ID Card, Driving Licence.
  4. Identity Proof: Any one of the documents – Passport, PAN Card, Ration Card, Aadhar Card, Voter’s ID Card, Driving Licence.
  5. Income Proof: Last Six months’ bank statements, Income Tax Return, Salary Slip, Balance Sheet, etc.

How to apply for a Small Credit Loan?

It is important to know how to get a Small Credit Loan from an NBFC app. The process to apply for a loan is as follows:

  1. First of all, you have to choose an NBFC which can give you a loan.
  2. Download and install the application on your mobile.
  3. Register using your mobile number and email ID.
  4. Provide all the documents asked by the app.
  5. Now select the eligible loan amount and tenure time through the app.
  6. Next, the app will show you the repayment schedule, such as the due date and repayable amount, read it carefully and click on the ‘OK’ button.
  7. Now click on the ‘Add Savings Bank Account’ button to receive the loan amount in your bank account.
  8. E-sign the loan agreement using the OTP sent to the registered mobile number.
  9. Once you sign the agreement, your application is forwarded for processing.

FAQ Related to Instant Small Credit Loan Apps

Which app provides small loans?

There are many applications available on mobile app stores that provide you with small loans to meet your financial needs. You can choose RBI-registered NBFC apps like Kreditbee, Moneyview, Navi, etc., to take loans on your credit profile, CIBIL score, income, and requirements.

How to get 15000 rupees instantly?

You want an instant Rs 15,000 small loan to meet your financial needs. You have to install the NBFC application on your mobile and provide all the information and documents asked by the app. After getting approval, the loan amount will be transferred to the bank account linked by you within a few hours.

Do small loans affect credit score?

Small loans can also help you improve your credit score by lowering your balance on other high-interest debts, such as credit cards. This can reduce the amount of interest you pay and free up more money for savings or investments. Paying off your debts faster can also boost your credit score by increasing the gap between your original loan amount and your current loan balance, which is another factor that credit bureaus consider.

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