We have all felt the need for a small personal loan to wade through tight financial conditions. Such loans help us meet urgent financial needs, without taking the burden of borrowing. They are easy to use as they have a flexible repayment schedule, simple eligibility criteria, and affordable interest rates.
The main events for which small personal loans are mostly required are listed below:
- Start of the professional career: If you have just started your professional career, you can borrow to fund small capital expenses such as the purchase of items like a bike, a laptop and a smartphone.
- After retirement: If you are a retired professional who is living on a fixed savings plan, you can take a small personal loan to meet urgent medical or travel expenses. It is better to opt for a loan than break your fixed deposits.
- Educational expenses: Students can take a small personal loan to defray a part of their educational expenses. They can start making repayments when they embark on their professional careers.
- Urgent working capital requirements in business: If you are facing a cash flow problem in your business, you can take a small personal loan to fund some urgent expenses. You can repay it when your receivables realise.
- Home remodelling or refurbishment: If you are willing to remodel your home and you have a cash flow problem, you can take a small personal loan to tide over this situation.
- Wedding in the family: If there is a wedding in your family and there are certain unexpected expenses, a small personal loan can help you manage it with ease.
The advantages of taking a small personal loan are listed below:
- Unsecured finance: A personal loan does not require collateral or security. No guarantees or property mortgage is required for obtaining this loan.
- Nominal processing fee: The range of loan processing and administration fee for a small personal loan from most providers is very nominal at only 2%.
- Speedy processing and quick disbursal: The payment of the small personal loan is quick. You can have money at your disposal soon after you apply for the loan.
- Attractive interest rates: The interest rates on personal loans are pegged at attractive and affordable rates.
- Loan amount: The amount of a small loan can vary between Rs. 40,000 and Rs. 1,50,000.
- Minimal paperwork: The documentation required is minimal, which ensures expedited processing.
- Flexible Equated Monthly Instalments (EMIs): Both standard and flexible options are available for small loans. The loan instalments are scheduled at your convenience. The EMI payments result in a debt payment of 12–18 months.
- Personal loan EMI calculator: Most websites provide you with a personal loan EMI calculator. If you input the loan amount, the interest rate, and the period, you can easily calculate the monthly instalment amount payable on your small personal loan.
- Low pre-closure options: If you want to prematurely repay your loan, you can do so at a small premature repayment fee of 4–5%.
- Open for individuals with a low salary or new businesses: Even individuals with low salaries can apply for a small loan.
- Eligibility criteria: You are eligible for a small personal loan if you are between 22 and 58 years of age; you have a minimum salary of Rs. 15,000; you have been working for at least one year.
- Documents required: Documents required are ID proof, address proof, bank statements, and employment certificate.
- Credit Score: A high CIBIL credit score of + 700 expedites the loan approval process. For people with low salaries, even a low credit score can help to get the process started.
Key Takeaways
If you are in a financial crunch, getting a small personal loan is the best way forward. It will enable you to ease your way out of a liquidity crunch. With easy and flexible instalments, minimal paperwork and disbursal, this loan is the best choice for meeting your financial expenses comfortably.
