FinTech is one of the faster-growing sectors in India. One of the services that the rise of FinTech has brought in India is payday loans online. It has been less than a decade that these loans have been introduced in India. You must have seen advertisements for these microloans while using e-wallets or heard about them from friends and acquaintances. A payday loan might sound similar to a personal loan in the nature of its utilisation but works very differently. As a millennial, you might be open to all kinds of loans but not this new category called payday loans. You can always check out flexible options like the Pocket Personal Loan, available on Finserv MARKETS. It can be approved quickly with no income documents and gives you easy access to amounts ranging from Rs.10000 to Rs.50000.
What is a payday loan?
Payday loans or microloans are short-term loans that are ideally meant for emergency purchases and liabilities such as medical expenses, vehicle repairs, debt repayment, expenses due to calamities, paycheck delay, etc. They are given with the understanding that the borrower will pay them back when they receive their next paycheck. These loans range from Rs.1500 to Rs. 1 lakh, and are usually given for one to three months.
I have heard that I can get the loan amount in an hour. Is that true?
Yes, a payday loan can actually be availed online in about an hour. Most payday lenders function via mobile apps and offer maximum convenience. The whole essence of payday loans is convenience. They take minimum paperwork.
The process, in brief, is as follows.
- Download the app.
- Register on the app. Some apps even allow you to register through Facebook.
- Fill a form with your personal details, professional details, and bank details.
- Upload the required documents.
- Authenticate through an OTP.
Once you are done with this process, the money can be in your account in less than one hour. If there is a discrepancy in the application, the company might call you to ask for certain verification, which could lead to a delay in the disbursal of money.
Who can avail a payday loan?
When it comes to payday loans online, convenience is the key. There are fewer requirements that you have to fulfil in order to take a payday loan.
- Be a citizen of India
- Be above 18 years of age
- Have a legitimate income source – salary, self-employment, or business
- Show repayment capacity
What’s the catch?
- Your interest rate would mostly be decided according to your credit profile and your financial needs. The usual rate ranges from 0.08% to 2%/day. A personal loan, available on Finserv MARKETS, or credit card spending would be cheaper. However, a payday loan would still be more convenient and instant.
- The processing fees of payday loans online could be anything between Rs.150- Rs.5000. It could also be up to 2% of the loan principal amount. Make sure you factor in these charges before applying.
- Some companies claim to not charge any late payment penalties. A lot of them charge up to 4% per day. This is going to cost you a lot if you fail to pay your payment by even a day. You will end up requiring another loan to offset this debt, and also deteriorate your credit score in the process.
- You provide your personal details to a company you haven’t transacted with before. Make sure you check the credibility of the company through online research and opinions of friends and acquaintances.
Considering all the pros and cons of payday loans, you might realise that you are not ready for this kind of convenience at the cost of the risks it poses. If you are a bit sceptical about payday loans and online transactions and prefer a personal loan, you can check out Bajaj Finserv Hybrid Flexi Personal Loan, available on Finserv MARKETS. You can get personal loans of up to Rs. 25 lakhs and avail flexible repayment options with the Hybrid Flexi Personal Loan.
But in the case that you think a payday loan would be the best option, go for it after checking your documentation and most importantly, your foreseeable ability to repay the loan once your paycheck arrives. If you think you will have enough money to pay back the loan with the hefty interest in time, avail your microloan immediately.
“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”