Most of you have heard of a personal loan which is always a feasible option to settle your emergencies. However, if you are not looking for a big loan, there is a mini personal loan, which gives you a small amount without breaking the bank. That's why it is also known as a small personal loan.
Let's get more into what's a mini personal loan.
When you search for financial aid, not a big one, mini personal loans provide you with the required funds. If you qualify for the mini personal loan and have the required documents, you can easily qualify and disburse the loan in your bank account.
Now, let's talk about the unique features of small personal loan that makes it a good option for borrowers.
Unsecured Loan: Firstly, a mini personal loan is an unsecured loan that doesn't require pledging collateral. It means you don't need to give any guarantee or keep a mortgaged property for personal loan approval.
Minimal Processing Fees: Every loan involves a processing fee added to the final loan amount. However, most banks offering mini personal loan charge minimal processing fees, which makes it a good option for the borrower to get a small financial aid from the banks/lenders. Some banks even charge 2% as the processing fee for the mini personal loan.
Attractive Interest Rates: The interest rate differs from one bank to another. Yet, big plays in the market offer small personal loans at highly attractive prices. The table at the end of this article will give you a head-to-head comparison between the interest rates offered by different banks.
Quick Loan Disbursal: A quick loan disbursal means the entire loan process requires minimum time, resulting in quick disbursal of the loan amount in your bank account. The long hours wait for a loan are now over with the small personal loan.
Provide Enough Funds for Emergency: As the name suggests, a small personal loan provides you with funds to settle your emergencies without stress. Most banks provide you with small personal loans between Rs. 40K and 1.5 lakh. This amount is far enough to make some small yet significant urgent purchases whenever required. However, this amount varies from one bank to another.
Minimal Paperwork: Paperwork is the most hectic task that no borrower wants to face when applying for a personal loan. Don't worry; small personal loans involve minimal paperwork that saves your efforts and time in getting quick loan approval.
Flexible EMI: Don't worry about paying heavy EMI that can burden your monthly budget. You can easily manage your monthly expenses and needs with small EMIs provided by most banks. You can choose small EMIs based on your current financial status or switch to a flexible installment option where you can pay a small amount monthly and manage other monthly expenses.
Low Pre-closure Charges: If you have enough funds to clear the debt and close your small personal loan, banks nowadays provide you the option with pre-closure charges. Interestingly, the small personal loan comes with low pre-closure charges, making it easy to clear your debt quickly without heavy charges.
As the name suggests, a mini personal loan is used to meet the end needs that don't require a hefty sum. For E.g., it is best suited to pay your medical bills, cover your foreign trips, purchase any new gadget or make a lump sum payment for another loan.
To understand the specific reasons, let's check out how a mini personal loan is used for different professionals.
Mini Personal Loan for Youngsters: Often, youngsters prefer taking a mini personal loan for bike, laptop, phone, etc. purchases.
Mini Personal Loan for Retired Professionals: Retired professionals prefer taking a small personal loan to settle their medical bills or plan a vacation. With a small personal loan, the amount comes in handy that ensure full enjoyment without heck.
Mini Personal Loan for Students: Small personal loans are also available for students. It helps the students to pay their tuition fees. It's important to note that students always require a co-borrower when applying for a small personal loan. Banks always require someone to take care of the expenses if the student fails to pay them on time.
Mini Personal Loan for Businesses: Businesses also require small funds sometimes for various operations year-round. It helps businesses to meet their small financial needs hassle-free.
There are numerous other reasons apart from what's mentioned above. From home remodeling to gadget purchases, a small personal loan is used for a wide range of small purchases that don't require a hefty investment.
Knowing whether you qualify for a small personal loan is crucial before submitting an online application is crucial. Firstly, you should note that a good credit score can't ensure 100% loan approval. A small personal loan is also provided to low-salaried individuals and business owners. That said, it has become a common unsecured credit facility for people of different income ranges. Yes, a good credit score contributes to other factors and pushes for quick loan approval. Yet, you should consider the eligibility criteria before applying for a mini personal loan.
If you qualify for the eligibility criteria given above, you can apply for the mini personal loan and get its quick approval. Small personal loans are nowadays available for everyone, including salaried professionals, pensioners, self-employed professionals, housewives, students, and more.
For quick approval, you are always recommended to keep essential documents handy. Below are the crucial documents you would require to apply for the mini personal loan.
Post submission, you are done with the online application, and everything is now in the lender's basket. They will review your documents and loan amount. Once approved, it will take a few hours to get the money right in your bank account.
You already know that a CIBIL score is a three-digit number between 300 and 900 that tells your creditworthiness based on your credit history. All lenders/banks check your credit score before proceeding with your small personal loan request. Checking your credit report is a must when banks offer you an unsecured loan.
Banks look forward to ensuring you have enough potential and funds to repay the EMI for small personal loans. A higher credit score proves that you can easily repay the loan without delay. Hence, borrowers with good credit scores get an advantage over others with the same loan request.
Usually, borrowers with a credit score above 700 points can easily apply for a mini personal loan and get it approved post-document verification.
Below is a head-to-head comparison of different banks/lenders offering mini personal loans alongside other crucial information i.e. interest rate, lowest EMI, etc.
|
App |
Interest Rate (per month) |
Minimum & Maximum Loan Amount |
|
Money Tap |
1.08% |
? 3,000 – ? 5 Lakh |
|
KreditBee |
24% - 29.95% (P.A.) |
? 1,000 – ?3 lakh |
|
Nira |
1.67% - 2.25% |
? 10,000 – ? 1 Lakh |
|
CashE |
2.50% |
? 1000 – ?4 lakh |
|
Money View |
1.33% |
? 5,000 – ? 5 Lakh |
|
EasySalary.com |
12% - 30% (P.A.) |
? 8,000 – ? 10 Lakh |
|
Home Credit |
Starts at 2% |
? 10,000 – ? 5 Lakh |
|
Lazy Pay |
18% - 25% (P.A.) |
? 10,000 – ? 1 Lakh |
|
mPokket |
0% - 48% (P.A.) |
? 500 – ? 30,000 |
|
FlexSalary |
Maximum 36% (APR) |
? 4,000 – ? 2 Lakh |
|
PayMe India |
1% – 36% |
Upto ? 2 Lakh |
|
PaySense |
1.4 – 2.3% |
? 5,000 – ? 5 Lakh |
|
Rupee Redee |
3% |
? 2,000 – ? 25,000 |
|
StashFin |
11.99% - 59.99% APR |
?1000 - ? 5 lakh |
These are the top small personal loan lenders available in India. You will find that most of the mini personal loan providers are Fintech companies who are also the private players in the list. If you want to choose one from a big list, the below-listed points will help you a lot.
Also Read- Things to consider in a Personal Loan other than Interest Rate
Check for Legit Lender: Authenticity matters the most; hence you should research the bank/NBFC, which is authorized by the RBI and are offering legit credit facilities. PSU banks are always the first priority in this list.
Check for Additional Charges: When researching for the mini cash loan, you should search for all the fees involved in the loan process. The bank should be transparent in sharing all the charges associated with the loan.
Check for Eligibility Criteria: The standard eligibility criteria are already shared above. Still, you must check for different banks for their criteria and check whether you qualify for it.
Good Customer Service: Salespersons from banks can always reach you until loan disbursal. However, it matters how they serve you after loan disbursal. You must check the customer service and ensure the bank serves quality customer service; whenever needed.
These tips will be highly effective in choosing the right bank for a small personal loan and fulfilling your emergency fund needs.
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