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Need immediate funds with no time for paperwork? You can check the document requirements and eligibility for instant loans here to meet your financial needs.
Instant loans have become significantly popular among borrowers due to their quick disbursal process.
Flexible loan repayment tenure of instant loans is another factor increasing its popularity among loan seekers.
If you are one such borrower, explore the documents required and eligibility for instant loans in this blog and make informed decisions.
Why Are Instant Loans Convenient?
Instant loans have quick approval and disbursal turnaround time, providing access to funds during financial emergencies, unlike traditional loans.
Its sanctioning process involves flexible eligibility criteria and minimal documentation. These factors make it convenient for individuals to opt for instant loans.
Documents Required for Instant Loans
Here is the list of basic documents that you need to apply for instant loans:
- Identity Proof: You need to provide identity proof such as a PAN card, Aadhaar card or Voter card.
- Address Proof: An address proof can be your passport or utility (electricity/gas) bills.
- Bank Statement: A lender might ask for your bank statement for the past 3 to 6 months to check your repayment capability.
- Income Statement or Salary Slip: The lender might ask for an income statement to verify the continuity of income and ensure smooth repayment.
Eligibility Criteria for Instant Loan
The following are the criteria for eligibility for instant loans that you must know:
- Credit score: Your CIBIL/credit score for loans needs to be 685 or higher.
- Based on Income: You need to be either salaried or self-employed to have continuous income.
- Based on Loan Purpose: You can opt for instant loans in any financial emergency.
- Based on Employment Type: You need to be employed in a private, public or multinational corporation.
- Based on Repayment Capacity: The loan must be repaid by the time the applicant reaches 80. Younger applicants, starting from the age of 18, can apply for an instant loan with a longer repayment period.
Tips to Ensure a Smooth Application Process
Here are some tips for loan approval that might help you at the time of application:
1. Maintaining a High Credit Score
A credit score is an integral factor that lenders consider to determine your creditworthiness.
A high credit score indicates less possibility of default by the loan seeker. To make your instant loan application process smooth, ensure you maintain a high credit score.
2. Filing Income Tax Returns
Paying income taxes within deadlines can support you to get instant loans. Before you apply for an instant loan, check if your income tax is accurately paid for the preceding two years.
Keep the tax documents ready in case the lender asks for additional or supporting documents.
3. Knowing Your Affordability
Before you apply for an instant loan, make sure to check your repayment capacity. You can use an online instant loan calculator to check the EMI by incorporating the amount, interest rate, and tenure. This helps you avoid loan rejection by lenders.
However, if you apply for a loan amount beyond your repayment capacity, lenders might reject it.
Loan application rejections act as negative records for individuals and might affect future loan applications.
4. Preparing Necessary Documents
Instant loan application requires minimal documentation. However, ensure that you have these documents ready while applying for instant loans for a hassle-free process.
Ensure you download bank statements for the required period and have your salary slips for the concerned months.
5. Employment Type
Employment type plays a crucial role in the instant loan application and disbursal process.
Lenders might offer loan facilities seamlessly to government employees, individuals employed in Public Sector Undertaking (PSU) or large private corporations.
However, an individual working in a small organisation or as a freelancer might face challenges in acquiring an instant loan.
How to Improve Your Loan Eligibility?
Here are the ways to improve instant loan eligibility:
1. Increase Your Credit Score
Various online platforms allow you to check credit scores and generate credit reports. Before you apply for a loan, ensure you check the credit report for discrepancies.
Further, make sure to pay your previous debts and loans, followed by credit card bills, within the due date to increase your credit score.
2. Stabilise Your Income
Lenders provide loans to individuals with continuous income sources seamlessly. A consistent job history and a present income source indicate financial stability for the loan seeker.
Ensure you have a stable income source before you apply for an instant loan.
3. Reduce Debt-to-Income (DTI) Ratio
Debt-to-income ratio determines the percentage of your monthly income that you use to pay debts, rent, mortgage, or credit card bills.
Lenders usually prefer loan seekers with less than a 40% DTI ratio. In case you have a DTI ratio higher than 40%, you can reduce it by paying existing loans or credit card bills.
The Bottom Line
Eligibility for instant loans includes a high credit score, in addition to age and income factors. A credit score above 685 is usually a good score to help borrowers secure an instant loan.
Ensure you maintain a high credit score to avail of instant loans from banks or NBFCs. Check your eligibility and get instant loans at Jar without any hassle!
Frequently Asked Questions
1. Do all borrowers have to submit the same documents?
The list of documents might vary based on the lender’s requirements, loan type, borrower’s employment type, and other factors.
Lenders might ask for additional documents to disburse your loan.
2. Do I need to submit original KYC documents to apply for an instant loan?
You do not need to submit original KYC documents for loan application. Providing photocopies (self-attested) of the original KYC documents is sufficient.
In the case of an online loan application, the lender might ask for scanned copies of your original KYC documents.
As a result, make sure to keep the original documents ready along with other copies.
