Need to Borrow a Small Amount of Money – Here Are the Options
Last updated: May 28, 2021, 04:01 AM ISTThe Covid-19 pandemic has necessitated the need for having extra money for meeting urgent financial requirements. With continued lockdown and businesses running at a slow pace, many individuals are finding the need to borrow small amounts of money to meet their day-to-day financial needs or even short-term needs like home rent, vehicle EMIs, staff salary etc. There is thus the need for short-term loans which can be availed quickly. However, the flip side is that such short-term loans come at a higher rate of interest as compared to traditional secured loans.
Still, these short-term loans are attractive to borrowers because they can be easily availed in one day. Let us explore few such loan options.
Loan against credit cardLoan against credit cards are pre-approved loans by the credit card service provider and can be availed if you have a credit card. The amount of loan approved depends on your credit card history and the sanctioned limit of your credit card. However, interest on such a loan depends on your credit card bank and is charged between 12% - 24% per annum along with a processing fee which is in the range between Rs.500 – Rs.700. Such loans are quite flexible with the tenure ranging between 3 months - 2 years.
Loan against PPF accountYou can get short-term loans against your Public Provident Fund (PPF) account. You are eligible for this option only from the 3rd financial year of opening such a PPF account with a maximum criterion of 25% of the balance available when applying for the loan. Loan tenure is a maximum of 3 years. You need to provide your PPF account passbook and Form D for availing of such a loan.
Loan against Savings and InsuranceFinancial institutions provide loans against small savings and insurance like National Savings Certificates or life insurance policies. The loan amount is dependent on the maturity value of such savings policies. Normally, 60% - 70% of the loan be availed.
Personal loanA popular short-term loan option that can be availed for meeting various urgent financial needs like marriage, education, travel, etc. This finds favor with small borrowers as one can avail loans as small as Rs.30,000, depending on the lender. However, such loans come at a higher interest rate than secured loans.
Instant loansOne of the recent additions to the lending scenario in India, instant loans are popular among the younger generation for their faster processing time and small loan availability. Instant loans are instantly available. Similar to personal loans but one can avail an even smaller loan amount. There are certain criteria to be fulfilled for getting such instant loans approved. The loan is generally approved within one business day with the amount being credited to your bank account within 24 hours.
SimplyCash, powered by HeroFinCorp, is one such user-friendly online instant personal loan app where, with just a few clicks, one can avail of loans up to Rs.1,50,000. Being a collateral-free option, an instant personal loan takes less time to process as no formalities of a guarantor are attached.