What Is a Small Personal Loan?

A small personal loan is an unsecured loan provided for a short term to cover urgent personal expenses such as medical bills, home repairs, or debt consolidation. Many lenders offer a 100% online application process with quick approval and fast funding times. While small personal loans do not require collateral, lenders assess eligibility and determine interest rates through different factors like credit score and employment history. Overall, small personal loans can offer a convenient solution for managing short-term financial needs, provided you carefully consider the terms and plan for repayments efficiently. 

Curious about how to get a small loan online? Keep reading.

Compare Lenders

When considering a small personal loan, you should compare different lenders to find the best terms for your needs. Key factors to evaluate include interest rates and additional fees such as prepayment penalties and late payment fees. Review the eligibility criteria to ensure you qualify to borrow money. You can also look for customer reviews to assess the lender’s reputation. By carefully comparing these aspects, you can select a lender that is most favourable for your conditions.

Check Your Credit Score

Before applying for a small personal loan, it's important to check your credit score along with your credit history. Your credit score helps determine your eligibility and the interest rates you will be offered. Most lenders require a credit score of 750 or above for small personal loans. However, always check with your lender, as some may also approve your small loan if you have a reliable source of income or a co-applicant with a strong credit score.

Understand the Eligibility Criteria

Generally, there are many other loan requirements, besides your credit check, that make up the eligibility criteria for a small personal loan. Different lenders have varying eligibility criteria, but most typically include factors such as your credit score, income requirements, age, residency status, employment status, and debt-to-income ratio. Therefore, before you apply, carefully review the eligibility criteria of your chosen lender to ensure that you meet their requirements. Look for user-friendly tools such as an online eligibility calculator which can provide an estimate of the borrowing limit based on your eligibility. 

Taking these steps ensures you are well informed and prepared before proceeding with your loan application.

Features and Benefits of a Small Personal Loan

From low interest rates to quick disbursals, a small personal loan comes with several features and benefits. Let us take a look at them in detail:

Attractive interest rates: Small personal loans come with competitive interest rates, especially for applicants who fulfil the eligibility criteria.

No collateral required: Small personal loans are usually unsecured, meaning applicants do not need to pledge any kind of asset to get the required funds.

Online application process: Many lenders now offer a fully online application process for small personal loans, allowing you to apply anytime and from anywhere.

Quick disbursal times: Small personal loans often have quick approval times and can even be disbursed within 30 minutes* of loan approval.

Convenient repayments: With predictable monthly EMIs and the flexibility to choose the tenure, you can pay off your small loan at your convenience.

How to Apply for a Small Loan Online?

An online loan application process makes your task quick and hassle-free. The process can vary from lender to lender. At SMFG India Credit, you simply have to provide a few personal details and validate your mobile number, and give details such as your monthly salary, existing financial obligations. Based on basic criteria like income, credit score, and existing debt, you will receive an offer. Choose your preferred option to proceed. Upon document verification and loan approval, the approved funds will be disbursed to your accounts within 30 minutes*.

Submit the Paperwork

The paperwork required will vary depending on your lender, but there are some basic documents that are commonly required:

1. Proof of identity, address, and age
2. Payslips for the last 3 months (for salaried individuals)
3. Income computation for the last 2 years (for self-employed individuals)
4. Account statements for the last 6 months
5. Income tax returns, or Form 16

Additional documents can also be requested depending on your profile and the lender’s policy at the time of loan application. 

Conclusion

A small personal loan offers a flexible solution for addressing immediate financial needs without requiring collateral. It's important to thoroughly evaluate the terms and understand everything about how to get small personal loans.

With SMFG India Credit, you can access small personal loans online at competitive and affordable interest rates, starting as low as 13%* per annum. Check out our personal loan eligibility criteria and apply now!