Small Personal Loan

In the rapid dynamic of today’s world, financial needs can arise unexpectedly, and traditional lending solutions often fall short of offering the agility and ease you seek. This is where a small personal loan can help you. These small loans online are designed to bridge the gap between your immediate financial needs and your next payday. Whether it be an unexpected medical expense, a home repair, or usual day-to-day expenses, an instant small loan is designed to offer the customer ease, speed, and convenience.

Features of Small Personal Loans

Following are the features of small personal loans.

  • No Collateral Required: Unlike secured loans, small personal loans usually do not require collateral, such as a house or car.
  • Flexible End Use: One of the key attractions of small personal loans is their flexibility in terms of usage. Borrowers can use these loans for a variety of purposes, including covering medical emergencies, funding travel, renovating homes, or consolidating debts​​.
  • Flexible Tenure: The repayment tenure for personal loans is usually flexible, ranging from 12 to 60 months.
  • Minimal Documentation: Applying for these loans, especially online, requires minimal documentation.
  • Quick Disbursal: Once approved, the disbursal of funds can be speedy, sometimes occurring within a few hours.

Interest Rates of Small Personal Loans

The interest rates for online small loans can differ depending on multiple factors. These usually include the credit score of the borrower, his or her credit history as well as the lender’s policy. An average interest rate for small personal loans ranges between 10.00%-21.00%

Compare Small Personal Loans

Here is a quick comparison of small personal loans across multiple banks and NBFCs. 

Bank Interest Rate (p.a.) Processing Fee
HDFC Bank 10.5% p.a. – 21.00% p.a. Up to 2.50%
ICICI Bank 10.50% p.a. – 16.00% p.a. Up to 2.50%
Yes Bank 10.99%. onwards – 20% Up to 2%
Kotak Mahindra Bank 10.99% and above Up to 3%
Axis Bank 10.49% p.a.- 22% p.a. Up to 2% of the loan amount
IndusInd Bank 10.25% p.a. – 26% p.a. 3% onwards
HSBC Bank 9.99% p.a. – 16.00% p.a. Up to 2%
IDFC First Bank 10.49% p.a. onwards Up to 3.5%
Tata Capital 10.99% onwards Up to 3.5%
Home Credit Cash Loan 24% p.a. – 34% p.a. 2.5%-5%
Aditya Birla Capital 14% p.a. -26% p.a. Up to 2%
State Bank of India 11.05% p.a. – 14.05% p.a. Up to 1.50%

Small Personal Loans Eligibility

Following is the eligibility to avail of small instant loans. 

  • Citizenship Requirement: Must be a legal resident of India.
  • Employment Status: Should be employed on a salary basis or operating as a self-employed professional/individual.
  • Age Criteria: Applicants must be at least 21 years old at the time of loan application.
  • Income Threshold: Must have a monthly income of at least Rs.10,000, although this amount can differ depending on the lender’s policy.
  • Identification Verification: Possession of a valid government-issued identification document is required.

Documents Required for Small Personal Loans

The following documents will be required if you are applying for a personal loan. 

  • Proof of Identity: This can include any of the following – PAN card, Aadhaar card, passport, or voter identification card.
  • Proof of Age: Acceptable documents include Voter ID, Aadhaar card, passport, or a valid driving license.
  • Recent Bank Statements: Applicants must provide bank statements from the last six months.
  • Photographs: A couple of recent passport-sized photos are required.
  • Proof of Income: This can be demonstrated through an income declaration statement, last year’s Income Tax Return (ITR), or salary slips from the previous three months.

Why Go for a Small Personal Loan?

Here’s why you should always choose a small personal loan. 

  • Flexibility in Usage: Small personal loans offer great flexibility in using the funds. 
  • Quick Approval and Disbursal: Small personal loans typically have a faster approval time than larger loans, which often involve lengthy approval processes. 
  • No Collateral Required: Most small personal loans are unsecured, meaning they don’t require collateral like a house or car.
  • Simpler Eligibility Criteria: The eligibility criteria for small personal loans are generally more straightforward and less stringent than for larger loans.

How to Apply For Small Personal Loans Online

Here’s a basic process to apply for a small personal loan online. 

  • Select a Lender: Begin by choosing the bank or financial institution from which you want to borrow.
  • Enter Required Details: Fill in the necessary information during the application process. You can use Urban Money to compare different lenders and select the one that best suits your financial needs. An Urban Money representative will get in touch with you.

Frequently Asked Questions (FAQs)

How do I get a small personal loan urgently?

If you meet the basic eligibility criteria and other parameters, your loan process will speed up by default.

How can I use a small personal loan to consolidate debt?

A Personal Loan is structured with a set monthly instalment (EMI) and a constant interest rate for a predefined period, typically ranging from one to five years. After consolidating your debts, you can repay the loan over a brief period with one monthly payment, maintaining a consistent interest rate throughout.

How can I use a small personal loan to finance a home improvement?

A small personal loan can be an efficient solution for financing home improvement projects. It offers quick access to funds, typically without collateral, and allows for predictable budgeting with fixed monthly repayments.

What are the risks of taking out an instant small loan?

Taking a small personal loan carries certain risks, such as potentially high-interest rates, the possibility of accumulating more debt, adverse impacts on your credit score for missed or late payments, shorter repayment terms leading to higher monthly payments, prepayment penalties, and hidden fees.

Urban Money