Loan amounts ranging from Rs 1000 to Rs 2 lakh are considered small-term loans; they are increasingly popular nowadays because of their easy availability. Therefore, salaried employees and self-employed individuals can opt for small personal loans online. Small amount personal loan are beneficial for those who are taking loans for the first time. Read on to know a bit about this type of personal loans.
What is Small Amount Personal Loan?
A small amount of personal loan is an installment loan that provides you with a desired and fixed amount of money. You can avail of a lump sum amount ranging from 1000 to 2,00,000. These loans are unsecured, meaning there is no need to provide collateral and guarantors to secure funds. The repayment tenure is usually around one year to two years. A personal loan is multi-purposeful. You can use it for any reason you want without hesitation, But some lenders might impose restrictions to follow ethics and rules. They cannot change fixed interest rates while repaying the loan.
Applying for a personal loan is almost the same as applying for a credit card. You need to fill in the relevant details of the desired loan, financial information, and your personal information. Before loans are approved and lent, the potential lenders will run a stern check on the credit history and credentials. It would help if you often had a credit score of 700 and above. If you fulfill the mentioned score, you’ll be considered an eligible borrower with good credit scores. The lender will set your loan terms, interest rate, and amount. After a successful verification, you can expect your loan amount to be credited in your bank account within 24-48 hours.
What are the characteristics of small personal loans?
- The amounts availed in small personal loans range from Rs 1000 to Rs 2,00,000.
- It is the best option for the loan borrower willing to take a loan for the first time. First-timers who have no credit history or are eager to build their credit history.
- The loan tenure of a small personal loan is 12 months to 2 years.
- A small amount of personal loan is cost with a low-interest rate.
- As per the borrower’s credit history experience, Loan EMIs are customizable.
Pros of Small Amount Personal Loans
Flexible and versatile –
small amount personal loans are flexible and highly versatile. You can use the loan amount for for various purposes like buying home appliances, unique gadgets, consolidating debts, paying bills, medical bills, and many more.
Lower interest rate and high borrowing limits –
Personal loans charge lower interest rates compared to credit cards. In a report in September 2021, the medium personal loan rates ranged from 10.46 percent, and the credit card medium rate of interest was 16.27 percent. Advantageously a person with good credit history can avail of instant personal loan at low interest rates.
Easier to manage –
A small amount personal loan with a monthly fixed interest is much easier to access and manage than other loans and credit cards with high-interest rates. People can choose a small personal loan and work a decent monetary life without money hassles.
Cons of small amount personal loans
Interest rates can be higher in some instances –
Personal loans do not always charge you the lowest rate. Having a poor credit score or bad credit history can let you get loans with high interest rates.
High fees and penalties charges –
The borrowing cost is higher when they charge penalties and fees. Certain loans charge you an origination fee ranging from one to six percent, and the processing fee is either subtracted from the loan amount or the monthly interest rate charges. But with Buddy Loan, be sure to have a small amount personal loan at no hidden or penalty charges.
Also Read: How to Get a Personal Loan: A Complete Guide on Eligibility and Documents
The Benefits of Applying for Small Amount Personal Loans Are
Quick approval –
Personal loans generally have a quick loan approval process. You can take advantage of comparing and meeting terms and conditions from various financial companies, NBFCs (Non-banking financial companies), and Banks. You’re less likely to be delayed with the advantage of having multiple financial firms. Small amounts of personal loans do not need any collateral.
Less cost EMI’s (Equated Monthly Instalment) with flexible repayments –
You can avail of lower EMI with flexible repayment tenure ranges from six months to five years.
Swift and minimal documentation –
Getting approved for a personal loan is much easier when you have the accurate set of documents required. It requires a couple of days maximum to get a loan nowadays, and it is an easy and accessible procedure for every loan borrower.
Customer care team –
Personal loan benefits come with a proactive support team that will guide you, give you all the information regarding the loan you desire to take, and clear all the queries. So you can have clarity before you opt for a personal loan.
High rate of approval & 100% Transparency –
Unsecured loans like personal loans in small amounts have a high approval rate. Lenders are true to their terms and conditions; they keep all the information relevant and 100% transparent. The borrowing process is evident, and it aggregates details of borrowers and lenders to each other to make it more transparent.
Paperless approvals –
There’s no need for paperwork like in traditional times; Candidates traditionally had to wait almost two weeks to get loan approval with a lot of paperwork.
Who can benefit from taking a small amount of personal loan?
Any citizen who requires a personal loan can apply to fund their personal or professional life needs. A business person can apply for a small personal loan to invest and fund their working capital like cash flow or financial funds in an emergency or shortage. The salaried employees and self employees professionals can apply and avail of small personal loans for any personal and financial purpose like – buying a washing machine, TV, laptop, or any other customer appliances for their daily goals.
Eligibility criteria for a small personal loan
The potential applicant must –
- The person should be a minimum of 21 years old
- Needs to be a resident of India
- Have an account in India from an authorized Bank.
- Earn a minimum earning of Rs 18,000 monthly income.
Essential document requirements to apply for small amount personal loans–
- Identity proof – Aadhar card, Pan(Permanent account number) card, voter ID (Identity), Passport.
- Age proof – Aadhar card, driving license, voter ID(identity), Passport.
- Bank statements for the previous six months
- Income proof – (salary slips of the previous three months or the last year, ITR(income tax return), or Income declaration.
- Few passport-size photos
How Can You Apply for a Small Personal Loan Online With Buddy Loan?
- Visit Buddy Loan website or install the app
- Next, click on the apply for a loan option
- You are now on to an application, where you’re supposed to fill in all your necessary details to proceed with the loan application.
- You will specify the amount of loan you’re willing to take and choose loan tenure, after which the lender can set a specific interest rate for the loan after considering all the financial credentials and credit score.
Applying with Buddy Loan makes the process much easier, and it is one of the best aggregators available in the financial market. You can also check your score on the Buddy Score website for the most accurate scores.
Also Read: Planning To Launch a Business? A Small Business Loan Is An Ideal Solution.
The Bottom Line
In conclusion, Small personal loans are beneficial for earning individuals and, It enables the availability of money for minute requirements. It fulfills various purposes. Small loans are available for a short time, So repayment is easy. Availability of the best interest rate is possible. So small personal loans are for everyone.
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