Instant personal loans, that don't require presenting documents, are on the rise, particularly among existing customers of a bank or customers with already established credit relationships. These instant loans also go by the term "pre-approved" and are provided based on the customer's previous financial history. The greatest advantage of such loans is that they take less time and very little to no paperwork.
What is a No-Document Loan?
A no-document personal loan does not imply that there is zero verification. It only implies that you don't need to upload new documents such as salary slips or bank statements during the application process. The lender uses information already with them via your existing account, credit card transactions, or previous loan history.
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For instance, if you have a salary account with a bank or you have been using a credit card of a lender for years and have paid the bills regularly, you could be offered an approved personal loan.
Who is Eligible for These Loans?
These offers are normally extended to:
Individuals who are employed or have a steady income source
People who have a high credit score, generally higher than 750
Customers who have existing savings, salary, or loan accounts with the same bank
Credit card users with a good repayment history
In some instances, fintech platforms even provide instant loans based on digital authentication through Aadhaar and your net banking or credit profile access.
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The Process of Verification
The process is entirely online. You may search online whether the bank—with which you have already established a relationship—offers such loans; make sure that you also match the criteria. In case you are interested, you can sign in to the official website or visit the bank app, select the loan amount and EMI schedule, and proceed with approval. The loan amount is transferred to your bank account soon, sometimes even within a few minutes.
You don't have to go to a branch or talk to a representative. Most of the steps are done through your registered mobile number and OTP-based verification.
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Things to Verify Before Availing of the Loan
Though these loans are simple to avail, it's necessary to read the terms carefully. Some important things to verify are:
Interest rate: These loans have high interest rates, even higher than standard personal loans.
Processing fees: A few lenders include additional charges that can make the loan costlier.
Repayment period: Ensure the EMI per month is comfortable for you.
Other terms: Certain loans have insurance or auto-debit facilities that get added by default.
It's also essential to verify how long the offer remains valid and if it has any impact on your credit score in case of delayed repayment.
Instant no-document personal loans are helpful for urgent financial requirements. However, the borrowers must always carefully read the terms and ensure that they really 'need' the loan before agreeing to it. Though they save time, they must still be handled like any other form of borrowing—with good planning and forethought.
