Cash loans are small assistance to an individual at the time of need. They are small amounts given on small tenure and get sudden approvals and disbursal to make the borrower feel at ease. Cash loans are usually taken by the individuals who do not maintain a bank balance but have the capacity to repay the amount in short duration.
Cash loans offer small amounts that do not extend beyond a year. They are unsecured loans but banks give some means to ensure that the amount is repaid.
How are cash loans different from personal loans?
- Amount: Cash loans are smaller in amounts as compared to personal loans that can be offered up to 15 lakh or more.
- Loan duration: Since cash loans offer a small amount so the duration of repayment is also less as compared to personal loans that can even last up to 10 years.
- Credit score: Ensuring safety, cash loans are easily offered to the people with bad credit scores however some banks might be particular about the credit score.
- Process: Cash loan process is easy and mostly online. It also gets fast approvals and faster disbursals.
- Documentation: Cash loans work on minimum documentation policy. The list of documents might only ask for a photo or national ID and your address proof. The documents requirement vary at different platforms offering this service.
- Security: Cash loans cannot be completely termed as unsecured as the lending organisation also have some clauses either they keep any of the borrower’s possession as collateral or keep card details or account details from where they can reimburse the amount.
- Interest rates: Interest rates on cash loans are extremely high as they are offered for a short duration of time.
Eligibility for Personal Loan
Cash loans are not subject to strict eligibility and therefore are human-friendly. Yet, cash loans have basic necessities that need to be fulfilled.
- Source of income: The borrower must have a minimal source of income. The amount of the monthly income required to get the loan varies from bank to bank. Some even offer a loan to a person earning 5000 a month. The borrower must be able to justify his/her income with supporting documents.
- Age: A borrower should fulfil the minimum age requirement that is again variable from 19-21 years.
- Supporting documents: To get cash loan one has to fulfil the minimum documents required that can be limited to Aadhar and PAN card.
- Duration of employment: The borrower must be able to justify the minimum tenure of his employment required by the lender.
- Factors to be considered before taking a cash loan
It is the most important parameter to be thoroughly analysed before taking a cash loan. Since cash loan is offered for a shorter duration, the interest rates are usually higher than other loans, therefore, it is important to compare the best available offers and choose the one that offers minimum interest rate. Interest rates are variable and go up to 30% also, therefore, it is wise if you choose wisely by making a detailed research.
Duration of loan
Cash loans are offered for a short span of time that can be limited to a month also. It is always better to choose a mid-way because too short duration of loan has the highest interest rates that make it an expensive deal, therefore, it is better to choose the duration where you don’t feel burdened or end up paying extra instead you comfortably pay the amount.
Amount of loan
Cash loan brackets vary for different banks. Some banks cater to the lower
middle-class sections of the society, some target the middle-class. The section targeting the lower middle class usually have small amount bracket ranging from 20,000 or even less to 50,000 or more. You are the best to decide upon the loan amount as per your needs. Take it only when you need it since you have the sole responsibility to repay it.
Security of platform
Security of the platform from where you avail the loan plays an important role. It is important to thoroughly research on the credibility and security of the platform you wish to avail the loan from. Since cash loans are small amount and instant, the entire process can happen online. Be aware yet!
Cash loans are the friendliest options available provided you repay the amount on time and avail the option only when you need it because inviting unwanted liabilities can make you feel burdened and you would feel the weight of it every month. Make your life free from such instalments and live a life of freedom on your hard earnings.