Instant Personal Loan vs Regular Personal Loan: What’s the Real Difference?
An instant personal loan and a regular personal loan are essentially the same kind of borrowing instrument, with instant loans only differing from the standard ones in the speed of processing. However, before you proceed to apply for a personal loan, make sure that you consider several factors like the interest rate, APR, fees, length of the tenure, and repayment conditions of your intended loan.
Quick Read
- An instant loan could be a viable option if you need some money urgently and want an online application process.
- Your income, credit history, and existing EMIs can affect the loan amount you may be eligible for.
- A lower EMI may cost you more in the long run since you will be paying more interest on your loan due to a longer tenure.
- Before applying for the loan, check the KFS, APR, and other charges, and the terms and conditions of the repayment schedule.
Money issues rarely come when you are prepared for them. One random expense can happen and leave an imprint on the upcoming month’s budget, as a sudden need for extra cash becomes apparent. An easy solution would be a personal loan that can be acquired within mere minutes, but the process of getting one is not the sole consideration for the borrower. The interest, charges, and repayments matter just as much.
What Is an Instant Personal Loan?
An instant personal loan generally means that your loan request goes through a quicker online application and verification process. Depending on the lender, you can apply online and even upload necessary documents in some cases. It is important to note that instant does not mean that the loan will be approved, disbursed, or available in your account within a few minutes, as the lender will still have to review and verify your application before approving it.
In the case of digital loans, as per RBI guidelines, the lender will have to mention the APR (Annual Percentage Rate) of the loan and adhere to other standards relating to borrower consent, data privacy, and other requirements.
What Sets an Instant Personal Loan Apart From a Regular Personal Loan?
The main difference is usually the speed and level of digital processing. An instant personal loan generally uses a faster application and verification process, while processing times for regular personal loans vary by lender.
| Factor | Instant Personal Loan | Regular Personal Loan |
| Application | Usually online | Online or offline |
| Processing | Generally faster | Varies by lender |
| Verification | Often digital | Digital or manual |
| Disbursal | Usually faster after approval | Depends on the lender |
| Interest and fees | Vary by lender | Vary by lender |
Note: The faster process doesn’t necessarily equal a lower-cost loan. Before taking out any loan, carefully consider the APR, the fees, and the various repayment options.
What Do You Need to Check Before Taking Out an Instant Personal Loan?
Before you take an instant personal loan, compare the speed of disbursement with the following factors:
- APR and the interest rate: Find out how much you will be charged as a borrower and how it will impact your EMI.
- Processing fees: Learn about the applicable taxes and processing fees.
- Prepayment terms: Find out whether there are any fees associated with paying off your loan early.
- KFS: The Key Facts Statement (KFS) provides you with important information regarding your loan, including the amount, the APR, the fees, and other key points.
- Regarding the lender: Make sure that the digital lending app is linked to a regulated bank or NBFC that is in fact providing you with the loan.
The RBI advises that, before applying for a digital loan, you should read the Key Facts Statement, the sanction letter, the privacy policy, and any other relevant documents carefully.
Conclusion
For borrowers who need quick access to funds, platforms like Finnable offer a digital personal loan application with a paperless process and no collateral requirement. Eligible applicants can borrow up to ₹10 lakh, with repayment tenures of 6 to 60 months and disbursal in as little as 60 minutes, subject to approval and verification.
Faster digital processes can help salaried professionals manage urgent personal expenses without a lengthy application process. However, the final loan amount, interest rate, fees, and repayment terms depend on the applicant’s eligibility and financial profile.
