Considering an Emergency Loan Balance Transfer – what you should know

Very often, managing your existing emergency loan can be tough. In situations like these, it is only natural to choose options like balance transfer. After all, it’ll reduce your outstanding debts and help you manage the monthly budget more conveniently. But what does balance transfer mean and how does it work? Well, that is what we will explore over the next few sections.

What Does Balance Transfer Mean? 

When you choose an emergency loan balance transfer, you are simply agreeing to transfer the current balance of your emergency loan online to another unsecured loan at a fairly lower rate. This loan will also have new terms. This way, you get to reduce your monthly installments. While getting your installments at a lower amount is one of the biggest highlights of a balance transfer, the benefits aren’t just limited to this aspect. So, here’s what you should know.

Low Tenure

According to the terms of the balance transfer scheme, you can either get the same loan tenure or a marginally reduced one. Here, it is better to go for a reduced tenure as it allows you to go debt free a couple of months earlier. This is an ideal option for people who had initially chosen a long repayment tenure and are now looking for a better offer.

Low Interest Rate

When you transfer your loan to a new account, you are also likely to qualify for lower rates. Check with your lender to find the rates you currently qualify for. If you don’t qualify for low rates, look for other lenders offering balance transfer plans. That said, do not just transfer your loan’s balance solely based on the interest rate. Instead, you should also consider other factors like the tenure of your loan, the processing fees and extra charges.

High Credit Score

In certain situations, a balance transfer might also result in a high credit score.  Since you’ve switched to a lender whose scheme you’re comfortable with, the likelihood of making timely payments is higher. This will be recorded in your credit report, which in turn will result in a high score.

Alternative Option

If you are still not comfortable with a balance transfer, you can always try consolidating your emergency loan debts. This option, however, is more suitable for individuals with multiple debts. Either way, explore both the options and choose the one that perfectly resonates with your needs.

Bottom Line

If you are struggling to pay your debts and want to stay financially afloat you should certainly opt for a balance transfer scheme. Almost all lending institutions, offering emergency loans extend these schemes to their existing customers. Look up these offers and finally choose the one that best resonates with your requirements.

Instant Loans vs Payday Loans in India

If you’re in need of urgent money, getting a loan from family or friends can be embarrassing sometimes. If you are salaried, you have a good number of lender options to pick from. The two most common types of loans available are unsecured loans and payday loans. Both these types of loans come with their own set of advantages and disadvantages. In this article, we look at what option would be best to pick from when you require money urgently. We look at both instant loans from Fintech lending companies and certain lenders that offer only payday loans to individuals who are salaried. Let’s go ahead and take a look.

Payday Loans: There are many lenders in the market that specifically specialize in payday lending. In order to qualify for a payday loan, you have to be salaried and meet the lender’s minimum income criterion. Now, payday loans come with their own set of flaws and pros. Here are some points that would be of interest if you decide to take-out a payday loan to manage an immediate financial shortfall.

Payday loans come with very high rates of interest: The average interest rate for payday loans is pretty high. Lenders can charge anywhere between 1% -2% per day. This easily adds up to a massive interest rate of about 30-40% per month. So if you’re looking for an affordable option, a payday loans is perhaps the last option you must have. But then again, these loans come with certain advantages as well, and you can use these advantages to your benefit.

You can get the amount immediately: These immediate cash loans work super-quickly. Once you submit your application by filling out the details (personal, professional and KYC details need to be filled-out), your credit profile is evaluated and a lending decision is subsequently made. Note that you don’t have to have the best credit score to qualify for a payday loan. Lending companies offering this form of credit offer loans even to those with subprime and below-average credit scores. Also, certain payday lenders don’t input your loan inquiry with the bureau, thereby not impacting your credit score – well, your credit score is impacted when multiple inquiries are made in your profile. More so, some lenders refrain from carrying out a hard pull on your profile, preventing an inquiry from being registered in that process. The idea is that you need to make the full payment toward your loan (along with interest) after you receive your monthly salary. Delays in repayment will attract late-payment charges that are very high.

Coming to unsecured loans, they come with more affordable rates as low as 11% p.a. With unsecured loans, you can also get access to higher loan amounts and extended tenures. Qbera is a popular Fintech lending company offering unsecured loans in India from Rs. 1,00,000 to Rs. 15,00,000, against tenures ranging from 1 year to 5 years.

 

 

FAQs on Instant Personal Loans in India

Instant loans are incredibly popular for their flexible terms and borrower-friendly interest rates. But despite the convenience, some people think twice before signing the dotted line. Why? Because they aren’t confident about the instant loan approval process. So, in this article we will clarify all your doubts, leaving you with a holistic insight into the nitty-gritty of this financing option.

1. How Long Does It Take For Instant Loan Approval?                                                     Ans. The time taken for approving your instant loan will depend on your preferred lending institution. Usually, most agencies take at least 5 to 7 days to process your application. Companies like Qbera, however, only take a couple of hours to complete the process. If they do encounter a glitch during the approval, you will be duly informed about the updated approval time. However, in most cases, it takes from 24 to 72 hours to approve and disburse your loan amount.
2. Do I Need to Have a High Credit Score For Instant Loan Approval?
   Ans. When it comes to getting your instant cash loan approved, a high credit score is recommended. This doesn’t merely increase your chances of approval but also reduces the interest rates. That said, you will certainly find alternative lenders who offer instant credit to individuals with low credit scores. In these cases, a score of at least 625 is recommended. The higher the score, the better are your chances.
3. Can I Get an Instant Loan Despite Having Other Loans?
   Ans. Yes, you can certainly get an instant loan despite having multiple existing loans. However, before approving your application, the lenders will thoroughly assess your debt to income ratio. If you earn enough ad can comfortably afford these multiple debts, getting approved for the loan won’t be a hassle. If, however, your debts are half or more than your total income, getting approved for these loans might be difficult.
4. What Fees Will I Need to Pay to Get This Loan?
   Ans. Most lenders usually charge a processing fee to process and approve your loan. The percentage of this fee ranges from 1% to 5% of your total loan amount. Other common charges include the APR (annual percentage rate). Note that the APR includes your interest rate, processing fee, prepayment charges, and any other charge levied by the lender.
5. Can I Get Approved Despite Past Defaults?
   Ans. You can get approved for the loan if you defaulted on an existing loan for more than 2 years back. Any record after that will continue to be reflected in your credit report, thereby taking a toll on your approval chances.
6. Can I Use The Loan For Funding Relocation Expenses?
   Ans. As with every other unsecured loan, instant loans are multipurpose. That means you won’t have to state a specific purpose for getting the loan approved. You can use this loan to fund your relocation expenses, pay medical bills, consolidate debts, fund your wedding costs, pay airfare tickets, or meet any other important expenses.

 

 

Avoid these things while taking an Instant Loan in India

Instant money loan, as evident from its name, is one of the simplest ways to get quick cash. But very often, your quick loan application ends up getting rejected because of some silly errors that can be easily avoided. But what are these errors and how can you avoid them? Well, that’s what we will study over the next few sections.

Late Payments

Every time you apply for a loan, your bank or lender will provide a due date by which you’ll have to clear your outstanding dues. Most platforms also offer a grace period which is usually a couple of days more than the pre-fixed date. But if you fail to clear your dues within the late period as well, chances are, a certain fee will be levied from your account. While this fee might not seem like a big deal in the beginning, it can have a significant impact on your credit score. And when it shows up on your credit report, it will leave a negative impact on your potential lender. So, if you are looking to avoid this issue, simply make it a point to pay your credit card bills and monthly instalments on time.

Applying on Multiple Platforms

Do you want to be presumed as a credit hungry person while sending your instant loan application? In case you don’t, avoid applying for loans on multiple platforms. While we do understand the urgency of getting your application approved, applying on multiple platforms will only take a toll on your credit report, eventually pulling your score down. One of the best ways to avoid this is by doing your research and finalizing a lending platform that you ‘actually’ think will approve your application. Read their terms carefully and send in your application, only when you meet their eligibility criteria.

Putting Incorrect Information

Your quick loan application is likely to be rejected if you do not key in the correct information. Whether it is a spelling mistake, an incorrect address or anything else- if your details do not match with your government ID, there’s a high chance of your application being rejected. In order to avoid this, always double check each category and make sure you enter the correct details.

Having Large Debts

If you have multiple pre-existing debts, then too there is a high chance that your application won’t make through. This usually happens because lenders deem you to be incapable of handling multiple debts at once. In order to avoid this, always make sure that your debt to income ratio is 40:60.

Low Credit Score

It goes without mention that low credit score has one of the biggest effects on your instant cash loan application. So, if your score is low, start improving it before you finally apply for a new loan. Since your credit score determines your creditworthiness, lenders are likely to find you unreliable if your score is low.

Bottom Line

Now that you’ve considered every relevant aspect, getting your quick loan application approved will be simpler than ever!

I Need Money Urgently Should I Take a Payday Loan?

Have you ever found yourself asking ‘I need money urgently, so should I get a payday loan?’ If yes, you’re reading the right article. Over the next few sections, we will offer a complete lowdown on payday loans and check how it compares against other popular options like urgent cash loans and quick cash loans.

What Is a Payday Loan?

Alternatively known as salary advance loans or salary-day loans, payday loans are an unsecured financing option where you can secure a big amount at a short notice. The defining aspect of these loans is their relaxed eligibility parameters. That means you can qualify for them even if your credit score is under 600 or less. Since banks won’t extend their services to low credit score holders, this certainly seems like a lucrative option at the outset.

The next major benefit of payday loans is its quick disbursal time. Unlike traditional lending institutions that take several weeks to check, assess and process your application, payday loans are disbursed in 24 hours or less. So, if you’re in a tight financial situation this might seem like a silver lining.

Why Should You Avoid Payday Loans?

As we previously mentioned, payday loans appear lucrative on the outset because, in reality, they aren’t as feasible as you’d expect. This is primarily because of the several hidden charges these loans come with. Once you sign up for the loan, you will be bombarded with costs at the end of the month when you finally need to pay it off.

The next major disadvantage of payday loans is the high-interest rate. Unlike bank loans or instant loans, these loans come at a monthly interest rate of 3% to 4% (excluding GST) which translates to almost 36% to 48% p.a.

The final issue with payday loans is their short repayment tenures. Unlike our conventional loans, the repayment tenure for payday loans ranges from two to four weeks. If you fail to pay the amount within this time, you’ll be slapped with more charges, making your financial situation even more difficult.

Payday loans sound too good to be true because they aren’t. That is why you should consider other options even when you need urgent money.

What Should Choose Instead? 

Instead of payday loans, opt for urgent loans from reputed Fintechs. These loans come at a monthly interest rate as low as 1% which makes it convenient enough to borrow the money. Since the repayment period ranges from 1 to 5 years, you also have the complete flexibility in paying off the funds within your preferred schedule.

Bottom Line

A payday loan might seem like a lucrative option. But it often comes with more cons than pros. That is why you should carefully assess the situation and choose the more secure options like urgent cash loans instead. Unlike payday loans, urgent cash loans do not have any hidden charges. The best part: their interest rate is also significantly lower. Since several alternative lenders and Fintechs offer urgent loans, you’ll have plenty of choices as well.