Personal Loans are the go-to loan option for everyone looking to fulfil a wide range of financial requirements, from planned ones like weddings or travel to unplanned ones like medical emergencies. Along with that, the easy application process is also making a difference. Nowadays, applicants can apply online, which ensures instant approval for Personal Loans.
Owing to quick approval, instant Personal Loans remain in great demand, but the question that arises here is how they differ from traditional Personal Loans. Well, read on to find out.
Difference between instant Personal Loans and traditional Personal Loans
Here are some points where instant Personal Loans are different from traditional Personal Loans –
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Ease in the application process
The application process for an instant Personal Loan is straightforward and quick. You can apply it online through your smartphone or any other internet-connected device from your home. Just go to the website and click apply now tab on the Personal Loan section. After that, fill up the online application with the required details and submit it. This would take only a few minutes.
Whereas, if you opt for a traditional Personal Loan, you have to visit your lender’s branch office and understand the terms and conditions. Then fill in the details and submit with documents. This makes the whole application process very time-consuming.
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Less processing time
Another significant advantage of instant Personal Loans over traditional loans is that the processing time is almost negligible. Once you apply, you get confirmation of your loan approval within the same day. On the other hand, this process may take days or more than a week for a traditional loan as it involves checking the documents manually and then deciding whether to approve the application.
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Minimal documentation required
With instant Personal Loans, there is no extensive list of documents that you need to submit. Moreover, if you are an existing customer, the lender already has the KYC details, so this process cuts down even further. As a result, the loan’s processing time also reduces over time.
For traditional Personal Loans, you must submit hard copies of all the documents, which is time-consuming and costly. All this increases the hassle of borrowing.
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Instant disbursal of credit
One of the best advantages of an instant Personal Loan is its disbursal time. Since the processing time of these loans is less, you will also get the approval without any delays. Typically, the loan is disbursed instantly after accepting the offer post-approval. And this serves well in emergencies.
On the contrary, traditional loans take more time to approve an application. Since the complete system here is manual, the credit disbursal can take some days.
Apart from these differences, there are some minor dissimilarities between these two credit-securing methods. For instance, you may find floating interest rate on personal loan the instant ones with one lender but not with the traditional ones. Or one lender does not have the provision of part payment with instant Personal Loans but offers the same with traditional Personal Loans. So, reviewing these more minor details is also essential.
Parting thoughts
Instant Personal Loans are so popular mainly because of their convenience of processing and instant disbursal of funds. Meanwhile, traditional loans are sometimes favoured due to the trust factor that borrowers develop over the years. One of the reasons may be the existence of a branch office. Also, people often tend to believe more in face-to-face interactions than in online chat.
No matter whichever option you choose, you should always be aware of the terms and conditions of your lender. Check if you are satisfied with the interest rate, repayment options and other facilities. A loan can be an excellent option for meeting any immediate cash need. However, it is always wiser to stay financially healthy. Hence make a comparative study of both the options and understand the pros and cons of each before choosing the one that suits you.
