Unexpected bills lining up?
Get a small amount personal loan at a low-interest rate
Can’t wait for your salary to buy groceries?
Get quick small cash loans starting from ₹ 3,000
New gadget in the market?
Get your hands on it with a mini cash loan
What is a small loan?
A small loan is a type of unsecured personal loan that is useful for people who have an urgent but small financial need. As these loans are relatively small, they have shorter loan terms. When applying for a small cash loan, many lenders may give you the flexibility to choose a repayment tenure that’s best suited for you.
ProTip: When deciding how much to borrow, it’s always a good idea to plan the repayment well in advance. By doing so, you are aware of how much you can afford to pay every month. As a rule of thumb, you should not borrow more than what you can afford.
How small amount personal loan helps?
Most people take small loans to meet their small expenses, including and not limited to:
- Home expenses
- Latest gadgets
- Medical expenses
- Unexpected bills
Types of small cash loans
1. Payday loans
Payday loans are small loans that are borrowed for up to a month and are repaid with interest in one single instalment when the next salary kicks in. The amount of interest you could pay on a payday loan may vary from lender to lender.
2. Small personal loans
Personal loans are usually borrowed over longer periods of time (anything from 2 months to 5 years). This means you have more time to repay the borrowed amount. Interest on small personal loans is typically lower than the interest on payday loans.
3. Line of credit loans
A line of credit loan is also known as revolving credit. In this type of a small loan, you are approved for a personal line of credit, which has a certain upper limit. You can borrow what you need from this line of credit and repay it every month with interest. You can take as many small loans up to your credit limit from this credit line. The interest is charged only on the amount you borrow and not on the whole credit limit approved.
Why does taking a small personal loan make sense rather than taking a payday loan or a loan from local money lenders?
Know the Difference: Small Personal Loan Vs. Payday Loan Vs. Local Money Lenders
The differences outlined below will give you a clear picture of why a small personal loan is a better choice.
|Feature||Small Personal Loan||Payday Loan||Local Money Lenders|
|Interest Rates||Comparatively low (governed by RBI)||High||Very high (generally, decided by the moneylender)|
|Loan amount based on||Monthly income and repayment capabilities||N/A||Collateral provided|
|Credit Score||Improves credit score||May or may not affect credit score||No impact as the loan is not reported to the credit bureau|
|Terms & Conditions||Outlined in detail in a formal agreement||Outlined in a formal agreement||Lack of formal agreement. Terms are unclear and there is no legal binding|
|Repayment||Flexible||Need to typically repay within 14 days or by your next paycheck||Rigid and strict|
|Default Risk||Lower as you choose EMI according to your financial comfort||Higher as instalments for payday loans are huge||Higher as it may get difficult for you to meet the money lenders’ demands|
Why Choose MoneyTap for Small Loans?
MoneyTap’s small loan is a perfect combination of a small personal loan and line of credit. You can borrow money as low as ₹ 3,000 and as high as your approved credit limit (up to ₹ 5 Lakh). Let’s understand why MoneyTap is a better option for small loans with an example.
Rahul needed ₹ 15,000 to buy a smartphone. He applied for a small loan with MoneyTap online with minimal documentation. He was approved for a loan of ₹ 35,000 at an interest rate of 11%. From his credit line, he withdrew ₹ 15,000 and bought the phone. Rahul was charged an interest of 11% only on the ₹ 15,000 that he borrowed and not on his credit limit of ₹ 35,000. MoneyTap allowed him to choose his EMIs and repayment tenure (ranging from 2 months to 3 years) according to his financial capability. And he did just that. He opted for a loan tenure of 6 months. The money left in the personal credit line acts as emergency cash, which Rahul can use anytime without applying for another small cash loan.
Key takeaways from this example: Features of small personal loan from MoneyTap
- MoneyTap approves loan amounts ranging from ₹ 3,000 to ₹ 5 Lakh
- Can be used for any purpose. No restrictions on how you spend the money
- Competitive interest rates
- Pay interest only on the amount you borrow
- The line of credit is available to you for a lifetime to use whenever you need emergency cash.
- Flexible repayment options. Choose a tenure and EMI amount which you can pay comfortably.
- No collateral or guarantors required
- Minimal documentation
How to Get Small Loan From MoneyTap
- Step-1: Download the MoneyTap app & register
- Step-2: Submit your application with minimal documentation
- Step-3: Know your approval status within minutes
- Step-4: Get the small personal loan amount once the final KYC documentation is done
Eligibility Criteria & Documents Required to Apply For MoneyTap’s Small Personal Loan
- Profession – Salaried or Self-Employed
- Age – Above 21 years and below 60 years
- Minimum Monthly Income – ₹ 20,000
- Work Experience – 3 years and above
- Credit Score – 650 and above
Who should take a short-term loan?
Salaried individuals, self-employed individuals, and businesses can choose to take a short-term loan.
How much minimum money can I borrow?
MoneyTap offers loans as small as ₹ 3,000.
How long does it take for the approval?
Once you fill the application form and submit the soft copies, MoneyTap just takes a few minutes to intimate the approval status.
Is guarantor or collateral needed for short term loan approval?
No collateral or guarantor is required for short-term loan approval.
How long can I take to repay a short-term loan?
You can choose a repayment tenure ranging from 2 months to 3 years.
Can I extend my repayment due date?
You are expected to repay the borrowed amount by the repayment due date. If you fail to do so, you may attract a penalty. However, some small personal loan lenders may offer you a grace period for repayment.