You get a message from a loan provider offering an “insta loan,” which lets you get money quickly when you need it. The idea of fast cash is very tempting, especially if you have an urgent expense. But how is an insta loan different from a personal loan? Knowing the main differences between these two options can help you decide which one is better for your financial needs. So, let’s dive in.
- Loan amount
Personal loans let you borrow a larger amount, starting from ₹50,000 and going up to ₹90 lakhs. They are good for big expenses like home renovation, weddings or education. Instant loans, however, offer smaller amounts, usually between ₹5,000 and ₹5 lakhs. These are better for short-term or urgent needs like medical bills, rent or other immediate expenses.
- Interest rate
Personal loans have lower interest rates, which makes them affordable overall. They are a good option if you have a good credit score and need a large amount of money with more time to repay it. Instant loans, however, come with higher interest rates. This is because they are approved quickly and don’t need much paperwork. Since instant loans are meant for short-term needs, their interest rates are higher than those of personal loans.
- Loan tenure
When it comes to repayment, personal loans offer longer tenure options, generally ranging from 12 months to 60 months, with some lenders even extending it to 72 months for higher loan amounts. This longer repayment period makes it easier to manage larger loans with affordable monthly instalments. Instant loans, however, have shorter repayment tenures, usually between 3 months and 36 months. While these loans are quick and convenient, it’s important to evaluate whether you can comfortably repay the loan within a shorter timeframe.
- Processing time
Personal loans take more time to process because they need detailed checks and paperwork. It usually takes 2 to 5 working days for the money to reach your account. If you don’t need the money right away and want a bigger amount, the wait is usually worth it. Instant loans, on the other hand, are much faster. They can be approved in minutes and the money is sent within 24 to 48 hours. This makes them a great choice when you need money quickly for an emergency.
- Credit score
To get a personal loan, you usually need a good credit score, around 700 or more. This is because lenders want to make sure you have a strong history of paying back loans, especially for larger amounts. A higher score also helps you get better offers, like lower interest rates. Instant loans, however, are easier to qualify for. Lenders accept lower scores, starting at around 650, making instant loans a better option for people who might not meet the stricter rules for personal loans.
- Purpose
Personal loans are versatile and can be used for a variety of purposes. It includes financing weddings, travel, education or even medical expenses. They’re a good option if you have multiple financial goals or need funds as you wish. Instant loans, however, are primarily designed for immediate or emergency situations. This includes paying medical bills, rent or utility expenses. Their purpose is to offer quick financial relief in times of need rather than supporting long-term financial goals.
Bottom line
Deciding between a personal loan and an instant personal loan online depends on what you need and your financial situation. Think about how much money you need, how quickly you need it and how much time you’ll need to pay it back. Take some time to figure this out so you can choose the loan that works best for you. Planning ahead can help you avoid financial stress and pick the right option for your needs.
