Mini Loans or Small Personal Loans: All you need to know

Whether it's a medical emergency, home repairs, or an unexpected expense, small personal loans can help meet your short-term financial needs. These mini loans provide quick access to funds during times of urgency with straightforward approval and verification processes. 

In this article, we will understand small loans in detail, including their benefits, and how you can qualify and apply for small personal loans.

What Are Small Loans?

Small personal loans, also known as mini loans, are short-term borrowing options that typically involve lower loan amounts. These loans are usually unsecured and are meant to fund immediate financial needs. Depending on your eligibility, you can get competitive interest rates, often lower than those of credit cards, and flexible repayment terms. With a streamlined application process and rapid approval times, they provide a convenient borrowing option for various short-term expenses. Several lending institutions, including NBFCs, and online lenders offer these loan options, providing borrowers with alternatives to high-interest credit cards. 

Eligibility Criteria for a Small Personal Loan

To qualify for small personal loans, lenders typically consider various factors such as age, income, and creditworthiness. The qualifying requirements also vary from lender to lender. Here are the basic eligibility criteria at SMFG India Credit for a personal loan:

• Age: 22-65 years for salaried individuals (25 years minimum for self-employed). Age should not exceed 65 at loan maturity.
• Nationality: Indian citizenship and residency are required.
• Income: Minimum monthly income of INR 25,000 for Delhi/Mumbai residents, INR 20,000 for others. Self-employed eligibility income is based on minimum annual turnover and profit after taxes, which varies by the nature of the industry or the domain of work.
• Work Experience: At least 1 year overall for salaried applicants, with 6 months at current employer. A self-employed applicant’s business should be operational for at least 3 years.
• Credit Score: A CIBIL score of 750 or above is required to apply for personal mini loans.

*Please note that the final eligibility will depend on several factors including SMFG India Credit’s policy at the time of loan application.

Documents Required to Apply for a Small Loan Online

When applying for small personal loans online, you'll typically need to provide some documents so that lenders can verify your loan eligibility. The basic documentation requirements at SMFG India Credit include:

• Identity Proof: Aadhaar card, Passport, driver's licence, PAN card, etc.
• Address Proof: Aadhaar card, utility bills, rental agreement, etc.
• Signature Proof: Passport or PAN card
• Income Proof for Salaried: Last 3 months' salary slips, last 6 months' account statements, ITR/Form 16
• Income Proof for Self-employed: ITR for the last 2 years, balance sheet, profit & loss statement, last 6 months’ account statements, etc.
• Business Proof: GST number, registration certificate, etc.

Having these documents ready can streamline the application process and lead to faster approval. Additional documentation may be required depending on your profile and SMFG India Credit’s policy at the time of loan application.

What Are the Features & Benefits of Applying for Small Loans?

Mini loans have several advantages from attractive interest rates to a potential positive impact on your credit score. Here are some of the most prominent features and benefits you can anticipate:

• Quick Approval: Small personal loans often have fast approval processes and quick disbursal times, subject to your eligibility. This rapid turnaround is invaluable for getting the loan funds in times of urgency.
• Lower Interest Rates: Compared to credit cards, small personal loans typically offer lower interest rates for eligible applicants. This can significantly reduce the overall cost of the loan, making it a more economical choice for borrowers.
• Fixed Repayment Schedule: With a fixed repayment term and consistent monthly payments, borrowers can budget their finances more easily. Knowing exactly how much to pay each month can help manage your existing obligations effectively. Also, a definite end date for the loan can help you plan for future financial goals as the loan progresses.
• No Necessity of Collateral: Being unsecured loans, you do not have to pledge any of your valuable assets as collateral to secure the necessary funds. 
• Potential Credit Score Impact: Timely repayments on small personal loans can positively influence your CIBIL score, potentially leading to better financial opportunities in the future.

How to Apply for a Small Loan Online?

Applying for small personal loans online is a straightforward process. Start by researching and comparing lenders to find the best rates and terms. Once you've chosen a lender, check their eligibility requirements, fill out the online application form, and provide the required information and documents. Wait for lender approval and provide any additional details if necessary. Before signing the loan agreement, carefully review the loan terms, including the loan amount, interest rate, and any fees such as a prepayment penalty.

Conclusion

Small personal loans can offer quick financial assistance for immediate short-term requirements. SMFG India Credit offers personal loans at competitive interest rates starting at 13%* per annum and repayment tenures of up to 60 months*. Use our free personal loan EMI calculator to estimate your monthly payments and apply online from the comfort of your home!