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Instalments Loan – All You Need to Know
Shiv Nanda
Feb 04 • 2 mins read

Instalments Loan – All You Need to Know

2 mins read

What is an instalment loan?

An instalment loan is a type of loan that is usually borrowed to make a single large purchase like a car, college education, or a house. After the loan is approved, the borrower receives a lump sum, which has to be repaid in monthly instalments over the period of the loan.

Types of Instalment Loans
Some conventional types of instalment loans are:

How Instalment Loan Works

Instalment loans are loans that are paid down in instalments over a period of time. Each scheduled payment repays a portion of the principal amount borrowed and the interest on the borrowed amount. Examples of instalment loans include personal loans, auto loans, and home loans.

Features of Unsecured Instalment Loans

  • Hassle-free application: You just need to fill an application form with just a few basic personal details.
  • Instant approval: You will receive loan approval within a few minutes.
  • Quick disbursal: Once the lender verifies your documentation, the loan amount is instantly disbursed to you. Some lenders disburse instalment loans within 24 hours.
  • Flexible repayment period: You can select the loan tenure according to your financial capacity. You can use an instalment loan EMI calculator to determine whether you can afford the loan.
  • Collateral-free: The loan is unsecured. Hence you don’t need to put up collateral to borrow instalment loan.
  • No guarantor required: Since it is unsecured, you don’t need a guarantor to apply for the loan.

Eligibility Criteria for Instalment Loans

The eligibility criteria for instalment loans differ from lender to lender, but generally are as follows:

  • A steady income of ₹ 20,000
  • Minimum age of 21 years
  • A resident of India
  • Work experience of at least 2 years

Documents Required for Instalment Loans

  • Identity proof (Valid Driving License / Valid Passport / Voter’s ID / Aadhar Card / Pan Card)
  • Address Proof (Valid Driving License / Valid Passport / Aadhar Card)
  • Proof of income issued by your employer.
  • Salary slips of last 3 months
  • Bank statements of last 3 months

Instalment Loans and Credit Scores

Getting an instalment loan and paying it off is an excellent way to create and build your credit history. A good, long track of repayment history reflects your responsible credit behaviour and boosts your credit score.

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