Personal loans can be a financial lifeline when you need money for various reasons. You can use a personal loan for almost anything, like paying for a wedding, consolidating debt, or covering medical bills. They are typically unsecured, meaning you do not have to offer any assets, like your car or home, as collateral.

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However, like any financial tool, personal loans come with their own set of pros and cons. Let us break down these aspects by understanding: What are Personal Loans, and how do they work?

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Once you are well acquainted with the details of these financial instruments, you will be able to make informed decisions that align with your financial goals and circumstances.

What are Personal Loans and How Do They Work?

Personal loans are financial assistance a bank or any money lending organisation offers. You pay it back in monthly instalments, including interest. It's a way to get cash when needed, but understand the terms before borrowing. Here's how they work:

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A personal loan works by borrowing money from a bank or lender, which you repay over time with interest. When you apply for a loan, the lender reviews your application and checks your credit score. If approved, you receive a lump sum.

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You need to pay back the loan in fixed monthly instalments. These instalments will include both the amount you borrowed and the interest, which is like a fee for borrowing the money. The interest rate determines how much extra you pay for the loan. 

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When you repay the loan on time, it can improve your credit score. However, missing the payments can also damage your credit score. Some lenders might charge fees, like an origination fee when you first get the loan or late payment fees if you miss payments.

Advantages of Personal Loans

A Personal Loan is a great boon when you need money without hassle. It is convenient because you can repay it over pocket-friendly instalments and get a quick disbursal with little or no paperwork.

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Some key advantages of Personal Loans are a quick approval process with minimum documentation, no need for any collateral and its fixed interest rate irrespective of the duration. These loans can be used for any purpose and have pocket-friendly repayment options. 

Weighing the Pros and Cons of Personal Loans

As with any loan, you should know the advantages and disadvantages. So, weighing the pros and cons of Personal Loans is essential to staying secure. Here’s what you need to know before signing on the dotted line.

Pros of Personal Loans

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Offers Versatility: Personal loans can be used for virtually anything, from consolidating debt and starting a small business to funding a wedding.

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Build Credit: Paying back on time every month will positively impact your credit score.

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No Collateral Needed: Most personal loans are unsecured and will not require collateral, making them a favourable alternative to forms of secured financing.

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Pay Over Time: Personal loan interest rates remain fixed irrespective of repayment tenure. Your only responsibility is to pay the loan on time.

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Quick Decisions: Unsecured personal loans are easy for application and approval.

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Manageable Payments: Payment terms for personal loans are usually flexible. You can choose a tenure that allows you to optimise your monthly instalments according to your needs.

Cons of Personal Loans

While personal loans offer many advantages over other types of borrowing, it is also essential to understand the drawbacks of a personal loan.

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Interest Charges: Depending on your credit score and the lender, your interest rate could be anywhere from 6% to 36%.

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Potential Fee: Some lenders may charge origination fees, late payment fees or prepayment penalties if you don’t pay on time.

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Unnecessary Debt: Taking out a personal loan can lead to a more significant amount of debt. 

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Higher Payments: Personal loans can have a higher fixed monthly payment than credit cards.

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Financial Risks: Missing a loan instalment or making late payments can damage your credit score in several ways.

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Personal loans are helpful for many purposes, allowing you to pay off significant expenses over time. However, you want to be conscientious when considering a personal loan to avoid risking your long-term financial well-being.

You can quickly obtain an instant cash loan or personal loan in Delhi or anywhere in India from mPokket. Download the mPokket app, register by uploading a few documents, and borrow an instant short-term loan of up to Rs. 50,000! mPokket instant loans are credited straight to your bank account within 10 minutes. With mPokket, we offer cash, easy, quick, and short-term loans.

Obtaining loans wasn't always as easy as it is today. In the olden days, obtaining a loan was quite an arduous process and people were often left with no option to turn to shady loan sharks to get some much-needed credit.

But that's in the past now. Getting a loan today is much more streamlined and simpler, and there are competitive plans that make you spoilt for choice when you want to borrow money.

There are times when an unexpected expense might crop up and we don't have the money to cover it. In those cases, an instant loan is a huge help. You can apply for them online and are processed and disbursed very quickly with minimal hassle.

We have already looked at the different types of instant loans and here, we'll be looking at features, benefits and important points to note about them.

Benefits of instant loans

Instant Disbursal: Today's instant loan disbursals are so quick that the money is almost in your bank by the time you can yell, “Show me the money!” When you need funding immediately, applying for an instant personal loan will get the funds disbursed to your account within minutes.

Paperless process: When applying for a personal loan, you need to submit the necessary paperwork before your loan request is processed. However, with an instant personal loan online, all the paperwork is virtual, and uploaded online. And once you're a pre-approved customer, that step too is done away with.

Collateral, or lack of it: Being an unsecured personal loan, there's no need to submit any collateral when you apply for an instant personal loan.

Flexible tenures: Most personal loan services these days offer flexible tenures for repayment, letting you can choose a tenure that suits you best. Of course, it'll still be subject to the lender's maximum loan repayment term.

Low processing time: When it comes to instant personal loans, the processing time is considerably lower than for regular loans.

Flexible amount: You can go for any loan amount of your choosing, provided it's within the minimum and maximum amount specified by the lender.

Attractive interest rates: With a good credit score, chances are that you'll get the loan at an highly affordable interest rate, thus lowering the overall cost of the loan.

‘What is the best instant loan?' - How to compare

It's important that you compare the loans offered by different lenders. Here are a some things you should consider when comparing instant personal loans:

Interest rate: The interest rate can affect the total cost of the loan. So, make sure you check the interest rate before applying.

Default penalty: Should you not repay the EMIs as per schedule, you may be charged with a penalty. It's important that you compare these default charges by different lenders.

Flexibile repayment: Go for an instant personal loan that offers repayment flexibility and allows you to make pre-payments or part-payment.

Processing fee: If you are charged a high processing fee, you will need to pay more for your loan.

Minimum and maximum amounts: Be sure to take the minimum and maximum loan amount offered into consideration. It shouldn't be less than what you need, after all.

Whether you're a student or salaried professional, when it comes to instant loans, you cannot go wrong Thanks to the mPokket instant loan app, a dose of quick credit is just a tap away! You can easily obtain an instant student loan or salaried loan from mPokket. Simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and instant loans for salaried are both credited straight to your bank account within 10 minutes.with mPokket. We offer instant cash loan, quick loan, and short term loans online.

When you take a loan, do you automatically assume that the bank which is offering the lowest interest rate is the best choice? But the fact is, there are other charges or fees which you need to pay too, and after factoring them in your loan cost, you get the annual percentage rate, or APR.

Here, we'll be going into some detail about APR:

What is APR?

The actual yearly cost of your loan for any given tenure is your APR. It totals your interest fees along with any other charges levied by the lender, such as processing fees, insurance costs, among other things.

APR is calculated in percentage and it may be the same as or higher than the interest rate charged on loan.

How to Calculate APR?

Here's the formula that you can use as an APR calculator:

APR= [{(Fees + Interest)/ Principal}/ n]*365*100

The n represents the tenure of the loan in the number of days.

What are the benefits of APR?

• Since APR is a sum total of various fees that are associated with the loan you have taken, it is an important tool which will give you clarity about your actual loan cost.
• With the help of the annual percentage rate, you can make out which is the actual cheap loan provider.
• APR is a standard calculation which is applicable for various types of bank charges. Therefore, you can apply it for any bank loan offer.

What's the importance of calculating APR when applying for personal loan?

Naturally, you desire a low interest rate when you apply for a personal loan. Consequently, you'll be most drawn to the banks which offer you the lowest rate. However, as we've now learnt, you'll only know of the actual lending cost after you're done calculating the APR.

That's why you need to be aware of the many small but significant charges levied by the banks on their personal loan and only then come to a decision. Also, note that annual percentage rate doesn't work for floating interest rate. It's only meant for fixed interest loans such as a personal loan.

How to decrease APR of ongoing loan?

• Depending on whether you manage to acquire goodwill by paying your instalments on time, the bank might consider your request to reduce the annual percentage rate.
• Make a habit of paying bills on time and never miss your EMIs and credit card dues. You will soon get a good credit score, which will help you out as banks often make considerations for borrowers who have healthy credit scores.
• Your remaining loan can be transferred to another bank which offers a lower interest rate. As always, be sure to calculate APR beforehand.
• Take another loan from a different bank at a lower APR. You can repay your existing loan in full with that amount.

Always remember that the banks will not bother to inform you about APR and it's something you need to figure out on your own. This is commonplace in most financial institutes, unfortunately. Fortunately, with increased awareness thanks to the internet, more and more people are developing awareness about the importance of APR.

At mPokket, our mission is to use world class technology, transparent communication and quick decision-making to enable today's youth to attain financial independence. So, if your plans are ever put on hold in need of a loan, a dose of quick credit is just a tap away, thanks to the mPokket instant loan app!

You can easily obtain an instant student loan or salaried loan from mPokket. Simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and instant loans for salaried are both credited straight to your bank account within 10 minutes.

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Loan repayment is the act of paying back previously borrowed money, such as personal loans, home loans or education loans. This repayment includes both the principle and interest. Not repaying for long period will result in bad debt and being called a delinquent by the authorities.

Sometimes, being able to change the mode of repayment of a loan could prove convenient toward repaying loans. To that end, we look at some ways to change the mode of repayment for a loan:

What are the Different Modes of Loan Repayment

Standing Instruction: In this mode, you give the lender (where you are already a customer with a savings account ) permission to access your account to withdraw the EMI owed to them by you automatically.

This method involves no hassle or procedure each month. You can also specify on which date the lender can withdraw the EMI. You need to keep your account funded to make sure the EMI payment is not missed when the bank tries to withdraw the EMI. This way you will not miss any payments.

Post Dated Cheques: This involves giving post dated cheques equalling the loan tenure to the lender, which they will submit to the bank on the date specified on the cheque. This is not available in all areas. It is also like SI but a more traditional way where the cheque has to be physically sent to the borrower's bank instead of the funds withdrawn electronically.

Electronic Clearing Service: ECS is based on the same principle as SI where you'll give the lender bank access to take the EMI from your account. The lender bank will then give the signed consent form and cancelled cheques to your banker, who will approve the transaction of EMI from your account. ECS can be used if you don't have an account with your lender bank.

How to Change Your Mode of Loan Repayment?

You have to begin by reaching out to the nearest bank branch and filling up a request form. Here's the process to be followed for SI, ECS and cheques:

Standing Instructions

1. Request a form for swapping repayment instructions.
2. Three security cheques favouring ‘Lender Bank with Loan Account No.' The cheques should be undated and filled with a value equal to the sum of three EMIs.
3. In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents of the bearer, such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

Electronic Clearing Service

1. Request form for swap of repayment instructions.
2. Security cheques favouring ‘Lender Bank with Loan Account No.'
3. ECS mandate duly filled and verified by your banker.
4. Swap Charges of Rs.500/- favouring ‘Lender Bank with Loan Account No.'
5. In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents (self-attested copy and original for validation) of the bearer such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

Post Dated Cheques

(Only allowed if the location is non-ECS)

1. Request form for swap of repayment instructions
2. Revised post dated cheques in favour of ‘Lender Bank with Loan Account No.' for the balance EMIs.
3. Swap charges of Rs. 500/- favouring ‘Lender Bank with Loan Account No.
4. In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents (self-attested copy and original for validation) of the bearer, such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

When you take loans using the mPokket instant loan app, be it an education loan, a service loan, or a salary advance loan, timely repayments improve your CIBIL score, which will help you be eligible for larger loans and even improve your employment prospects.

That's why, If you are seeking an instant short term loan or salaried loan and wondering where to turn for some quick credit, simply Simply download the mPokket online loan app, register by uploading a handful of documents, and post the online loan approval, borrow instant personal loans of up to Rs. 50,000. mPokket instant loans for students online and instant loans for salaried are both credited straight to your bank account.

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With stock trading so accessible and so with so many different options among stocks to buy today, nearly everyone from college students to working professionals are trying their hand at the share market. And why not? If you have a pulse of the Indian stock market, know what you're doing and make wise, well-informed decisions, you could stand to benefit.

However, just as properly timed decisions to buy or sell stocks will pay off for you, ill-timed decisions could end up costing you.

With that in mind, here are six things to remember before selling your stocks:

Lower Trading Volume

When you find that a stock is unexpectedly trading at a lower volume than before, it might be a sign of trouble. Stock liquidity - a measure of how quickly a stock can be bought or sold – is a crucial factor if you're wanting to sell stocks that are not performing well. If you're unable to sell your stock for a lack of buyers, you should have to hold on to it and hope the company can get through the rough patch it's going through.

Reduced Dividends

If you see companies cutting back on dividends, or even getting rid of them entirely, it's time to take a hard look into their internal workings. You should be checking the monthly and quarterly performance of the companies that issue your stocks.

Pay extra close attention if a company cuts dividends as it could hint at a more serious event at play. Perhaps, it's a sign of cashflow trouble or other changes or issues that could affect the stock value.

Financial Ratios

It's great if one of your stocks had a good return, but always stay alert and look for any signs that it might start to decline. There are many such signs and they can often be found in the form of financial ratios.

The health of a company which issues the stock can be measured through a fundamental analysis, which is a close audit of financial statements. Those who know the market well use financial ratios to obtain insights and predict how a company will fare in a given timeframe.

However, since companies keep their financial details closely guarded, the figures used to compose the ratios can be difficult to obtain.

Target Prices

Traders set a floor on a share price so that should it drop below a certain level, they sell it to maintain a profit. You can also set an upper limit that would trigger your sale.

This is because you might be afraid that the stock will have a hard time supporting a market price above a certain level, and that any bad tidings could send the share price into a nose dive. Setting limits on when to sell and when to buy ahead of time can help control your apprehension.

Over time, this practice could end up benefiting you, with higher profits, as you'll be less likely to sell too soon or give in to panic-selling.

Selling Strategies

Make a habit of consider the bigger picture when you consider selling your stocks. If you have a feel for the market, about things which could affect stock value, you'll have a better grasp of the need to take timely action.

Hold on to some of your holdings

Should you have good profit in a stock, consider selling only a portion of your shares. Reinvest the profits into other stocks that are doing well, and let the others be as they are. This way, you'll spread the risk over a wider range of assets while still profiting. If the stocks you keep begin to plummet, you can always sell them and hopefully come away with some profit.

As stated earlier in our ‘6 things to keep in mind for achieving financial freedom' blog, wise share market investment is one of the keys to financial freedom, and it's never to early to start. When you need to buy some stocks, you can always turn to the mPokket instant loan app to get some quick credit.

If you are seeking an instant cash loan or quick student loans and wondering where to turn, simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant personal loans of up to Rs. 50,000! mPokket loans for students and loans for salaried are both credited straight to your bank account within 10 minutes.

Also read: What are the different types of Instant Loans?

2020 saw a virus bring the whole world to a standstill. And just when it seemed like the worst was over, the second wave of the COVID-19 pandemic came out of nowhere and wreaked havoc across the nation.

Nearly four lakh people died and many of them were their family's breadwinners. Reportedly, half of those who died were aged below 60 years.

It all goes to underscore the importance of having a sound financial back-up plan in the form of a life insurance policy to protect your family financially in your absence.

With so many families left to fend for themselves owing to the loss of the sole income-earning member, a life insurance policy in such situations can come to the rescue as it can help the family to overcome financial difficulties, if not the emotional setback.

Why is life insurance important?

Life Insurance is a financial cover for a contingency linked with human life, such as death. While a value cannot be ascribed to a human life, a monetary sum could be determined based on the loss of income in future years. Since there is loss of income to the household when human life is lost, the payout from a life insurance plan can provide comfort in such times by compensating for the lost income.

Life insurance is a means towards ensuring that your immediate family has some financial support to fall back on in the event of your untimely demise. It could be to repay debt like a home loan or achieve financial goals like children's higher education or old-age care for parents or spouse.

How much insurance cover do I need?

There's no perfect formula. Consider your present lifestyle and future needs while arriving at a figure. In case the sum assured is not carefully evaluated based on the future needs of the family, the insurance proceeds may exhaust sooner than you know.

The concept of life insurance is that if something unfortunate happens to the policy holder, his/her family can continue leading a comfortable life. That is possible only if the payout under the insurance policy is enough to compensate for the lost income due to the death of the policyholder for a reasonable number of years.

Which insurance policy is right for me?

There are various types of life insurance plans available in the market but most popular among them are Term Insurance Plans and Unit Linked Insurance Plans (ULIPs).

Term Life Insurance

In a term life insurance plan, the policyholder pays premium to the insurance company to get coverage against death. In case of the policyholder's demise within the policy period, the insurance company pays the sum assured to the nominees.

Term insurance is one of the preferred life insurance product as it provides a significantly large cover at affordable premiums.

Unit Linked Insurance Plans

ULIP or Unit Linked Insurance Plan is a type of life insurance policy, which offers you the benefits of market-linked wealth creation and life insurance coverage. They are amongst one of the preferred choices for securing one's long-term life goals.

As a policyholder, you have the opportunity to invest in a number of market-linked ULIP funds depending on their risk profile and investment horizon. At the same time, you get to enjoy the benefits of life insurance cover. Through the investment component, you can invest in equity, debt funds or a combination of both.

Both term insurance and ULIP plans come with tax benefits at the time of investment as well as at the time of maturity, as per the Income Tax Act 1961, subject to specified conditions.

Insurance is, by and large, a useful tool to have at your disposal. Life throws unexpected curve balls at us when we least expect, and it's good to have the means to tackle those situations in some capacity, at least.

Similarly, at mPokket, we realize that despite your prudent financial planning, from time to time, you might face a financial emergency of some form. During those trying times, you'll need a trusted friend by your side, someone who will not just provide moral support but will help you out financially as well.

mPokket is one of the best instant loan apps in India when you need some quick credit. You can easily obtain an instant student loan or salaried loan. Simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and loans for salaried are both credited straight to your bank account within 10 minutes.

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As a student who's on the verge of entering the working life or even a seasoned young professional, it's never too early or too late to learn how to recover from financial setbacks, such as poor credit scores.

We realize it might be difficult to maintain a good credit score during your college life. But it's worth trying for, since it can open up a lot of opportunities as you lay down the foundations for your career and future.

After all, a credit score could be the deciding factor behind buying a car, home or even paying rent. With more money-lending services being made available to students, it's led to increased cognizance about CIBIL scores among students.

If you wish to start fixing your credit score, here are some suggestions:

Revolving debt over instalment debt

Put simply, revolving debt is what you incur when you're in the habit of using a credit card. Prioritize paying off your credit card bills over say, student loan instalments or rent bills, as the interest on your credit card bill can pile up much faster. To maintain a good credit score, your credit card utilization should be 30 percent (or lower) of your total limit as well.

So if you ever find yourself spending over this limit, make sure to cut down on your expenses until you've reached the 30 percent mark. However, sometimes your essential expenses may incur more than this limit which brings us to our next point.

Go for your own credit card

As long as you're a beneficiary of an account belonging to a family member with a good credit score, it shouldn't be too difficult to obtain a credit card. Once you do, however, make sure your credit card is not abused always exercise caution when using it.

Try for a higher credit limit

Being eligible for a higher credit limit depends on whether you pay your credit card bills regularly. As time passes on, your credit score will improve as long as you've been making your payments duly as well as if you've been maintaining your credit card spending under the limit of 30 percent.

If you apply for a higher credit limit on your credit card, your score is likely to improve as it will be easier to stick to the 30 percent rule. That said, if you're already struggling to make your existing credit card payments, a larger credit limit may not be the best choice.

Pay rent with your credit card

The more positive payments you have on your credit card, the better your credit score will get. Paying off your rent with your credit card will add a positive payment on your credit history as long as you duly pay it off yourself when the amount is reflected on your credit card bill. This amount should be paid off before the billing period of your credit card though as rent paid with your credit card can accrue interest as well which will reflect poorly on your credit score. We should also mention that this option may not always be available as some landlords may not be comfortable with accepting credit cards as a mode of payment.

Review your credit score regularly

As per the law, every individual is allowed to get one free credit report from one of the three major credit companies every year. Make it a habit to check your credit report at every opportunity as errors on these documents are more common than you think. Most errors that have been reported to these credit bureaus are usually pertaining to incorrect information such as a misspelt name, wrong birth date or sometimes even being accidentally declared as deceased. Imagine trying to apply for a loan if your credit file says that you're dead; that's just a headache no one wants to deal with.

At mPokket, we exist to provide financial independence to youth and empower them with the means to be economically self-reliant.

So of you are seeking some quick credit by way of an instant student loan or salaried loan and wondering where to turn, simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant personal loans of up to Rs. 50,000! mPokket loans for students and loans for salaried are credited straight to your bank account within 10 minutes.

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The importance of having a decent credit score cannot be overstated. The need for a loan can arise at any time and being unable to get it on account of a low credit score can be quite problematic.

In most cases, a good credit score (750 or above) is mandatory. Falling below that by a considerable margin could cause you a lot of problems, such as these:

Affect your well-being

Not having access to credit when you need it most can affect your mental well-being and might force you to turn to the unorganized sector, at a much higher rate of interest to boot.

Credit Rejection

In situations that call for an urgent need of credit, such as medical emergencies, having a loan request rejection can pose a big problem. It can add to the burden of finances that you already need support for with credit.

Unfavorable terms if loan approved

If your credit score is in the range of 600-700 and say you're approved for a loan on account of good repayment capability, it will come at higher bank loan interest rates or at a higher amount of down payment, neither of which are preferrable options.

How to improve credit score

But it's not all doom and gloom if you happen to have dropped your credit score too low, here's what will be needed to be done for your part to improve credit score:

Find out the reason for the low score

A good first step would be to obtain your credit report, which can give you a clue about which factor is bringing your score down. Once you are aware of the factors pulling your score down, it is easier for you to take appropriate actions for improving your creditworthiness.

Prioritise repayments

Paying of EMIs or outstanding credit card bills on time is how you can lay the foundation for a good credit score. Start by pausing all your non-essential expenses and putting them towards your repayment of existing debts.0

Look before cancelling old credit cards

Another key factor behind your credit score is your credit history. If your credit history shows you act responsibly towards credit over long stretches of time, your older credit cards still in healthy standing can help your credit score. Therefore, it's advisable to not close your older accounts which are not being used by you.

Have a good mix of secured and unsecured credit

There are two types of credit - secured and unsecured credit. Secured credit requires an asset to be pledged or secured against your loan, while unsecured credit is free from such requirements. Home loans or vehicle loans are examples of secured credit, while personal loans and credit cards are examples of unsecured credit.

If you have a healthy mix of these two types of credit, it's a good indicator of a responsible borrower as it shows that the credit is not being used only for spending but also for building assets.

Limit your credit application

Each credit application you make results in a hard inquiry. Consequently, more of these hard inquiries eventually lead to a low credit score.  So, if you are wanting to improve your credit score, don't apply for credit during the interim period.

Only when your credit score begins to show a decent amount of improvement should you try to get a loan again. If you apply any sooner, you risk further downfall in the score due to rejections for bad credit score.

Remember that your credit score cannot be improved overnight. It requires consistent and dedicated effort from your part. So, don't lose hope, and follow the suggestions above.

And to know more about credit score reports, credit history check and more, know more about Top credit bureaus in India and how they affect your credit score.

At mPokket, we are very cognizant of the need to ingrain the importance of financial freedom from a young age. After all, our purpose is to provide financial independence to youth. With world-class technology, transparent communication and quick decision-making, we enable today's youth to attain financial independence.

It's possible that from time to time, you're in urgent need of some quick credit. If you're seeking an instant student loan or salaried loan and wondering where to turn, simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and instant loans for salaried are both credited straight to your bank account within 10 minutes.

Even until a decade ago, if you were planning to get a loan, your options were limited to the public and private sectors, and informal lenders. But over the past few years, non-banking finance companies (NBFC) have changed things around considerably.

What're the differences between banks and NBFCs?

Both private and public sector banks are regulated by the Reserve Bank of India (RBI). NBFCs, while also registered with the RBI, falls under the purview of the Companies Act of 1956. 

Banks follow a stringent loan approval process while NBFCs veer more towards leniency. Also, banks and NBFCs have different personal loan interest rate benchmarking systems.

While bank interest rates rely on the vagaries of RBI policy rates and market forces, NBFCs have control over interest rates charged to customers because of internal benchmarking.

Benefits of NBFC

Speedy approval and disbursal

NBFCs can get a loan approved within a matter of minutes, and the quicker approval means faster disbursal of the amount.

Risk assessment is automatic

The underwriting process is significantly faster in NBFCs, thanks to automated technology, which in turn has increased the speed of the application process. Also, this process lowers operating costs, which allows the NBFCs to give you a more competitive offer than bank loan interest rates.

Strong security system

NBFCs use highly advanced security technology to ensure that their customers' sensitive data is safe.

Superior data utilisation

NBFCs do not base their decision to lend you money solely on your credit score but numerous other data points are also considered when scanning your loan application.

More inclusive

For many customers that have been refused loans by banks and other institutions, NBFCs are lifesavers. They've been able to meet a variety of financial demands of such customers. Even business owners, to might've struggled to get a loan from a conventional bank, are able to get it from NBFCs.

Unique offerings

Customers these days have far more unique loan requirements than in the past. Just take, for example, the many startups that are taking off each day. In that regard, NBFC loans offer diverse options to meet these unique financial requirements, which has helped the healthy growth of the lending market.

Why consider NBFCs over banks for loans?

End to End Online Application Process

With just a few details, customers can complete the loan application process online.

Insta-approval

Customers can receive loan approval within a few minutes after applying with an NBFC for a personal loan.

Faster Processing

While the traditional loan process takes up to a few days, if not weeks, NBFCs can process a loan application within just 24 hours post-approval. Thus, you can count on them for your urgent needs.

Lower Interest Rates

Since NBFCs' base interest rates are on the basis of prime lending rate, which is not regulated by the RBI, they offer higher flexibility and more competitive rates of interest.

Top-quality customer service

NBFCs generally customer service that's far superior to banks. It's more personalised and heavier on attention to detail.

Eligibility Criteria

NBFCs have eligibility criteria that are not too hard to satisfy, which serves to extend their range to more customers. Having a low credit score isn't usually a big issue either since NBFCs consider other aspects than just your repayment capacity.

Minimum Documentation

NBFCs require minimum documents to process the loan, unlike banks where customers are bogged down with exhaustive paperwork.

All these advantages apply for mPokket, which is an NBFC. When you take loans using the mPokket instant loan app, be it an education loan, a service loan, or a salary advance loan, timely repayments improve your CIBIL score, which will help you be eligible for larger loans and even improve your employment prospects.

That's why, If you are seeking an instant student loan or salaried loan and wondering where to turn for some quick credit, Simply download the mPokket online loan app, register by uploading a handful of documents, and post the online loan approval, borrow instant personal loans of up to Rs. 50,000. mPokket instant loans for salaried and loans for students online are both credited straight to your bank account.

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In life, from time to time, we might encounter a shortage of funds to meet some unforeseen financial obligations or even unexpected immediate financial emergencies. 

That's where short term personal loans can prove quite useful. Basically, short term personal loans are loans that can be repaid within a one to two-year period. Short term personal loans are unsecured loans and as such, it is not required by you to post any sort of collateral as security. 

The funds are credited to your account quickly after the loan gets approved. However, it's important for you to note that the term "short term" is not due to the speed at which the funds are disbursed but the limited tenure for repayment.

When you opt for a short-term loan, the money outflow that goes into paying the total interest is significantly lower compared to a long-term loan. As a result, a short-term loan is cheaper than a long-term loan.

Advantages of short term loans

Lower time to incur interest

Given that short term loans need to be paid off within about a year in most cases, the total interest payments are lower too. Especially when compared to long term loans, the interest amount you pay is considerably less.

Faster funding time

Due to their shorter maturity period, short term loans are less risky than long term loans. This is because a borrower's capacity to repay the loan is less likely to change much over the short timeframe. As a result, the time taken by a lender to underwrite process the loan is shorter, which means you'll be able to obtain the needed funds more quickly.

Easier to acquire

Short term loans can be very useful for those who have below-par credit scores as the requirements are usually easier to fulfil. That's partly because short term loans are generally taken for small amounts.

Disadvantages of short term loans

The main disadvantage of a short term loan is that it's only for small amounts. This is so that the borrower won't be burdened with large monthly payments, thanks to the loans involving smaller amounts that are repaid sooner. 

How to apply for a short-term loan online?

There are two different ways to go about applying for short term loans online and below, we take a look at them:

Website

If you're using a desktop computer or kiosk, you can head over to the lender's official website. Once there, click on the section marked for loans and from the different types of loans it presents you, select short term loan. You then have to complete the application process online, providing the required details. The documents required such as ID proof, address proof and income proof can be submitted online.

Apps

This is fast becoming the preferred way of applying for short term loans due to the proliferation of smartphones among the population. Usually, the lender's application can be downloaded from the Google Playstore or Apple app store following which, the entire loan application process can be completed using the mobile phone only. No physical documents need to be submitted and the customer does not need to visit any place to get the loan approved and disbursed to his bank account.

Eligibility

Here are the eligibility criteria for obtaining a short term loan:

• You must be an Indian resident
• You must be currently employed for at least the last six months
• You should have professional experience lasting over a minimum period of one year
• You need to be employed with a private limited company or public sector undertaking. The latter includes central, state, and local bodies.
• Your minimum income should be Rs. 20,000 per month at least. And if you happen to reside in Delhi or Mumbai, your monthly income has to at least Rs. 25,000.
• You must be between 21 and 60 years of age.

What documentation do I need for getting a short-term loan?

You need some basic documents in order to obtain a short-term loan. These usually include:

• ID proof
• PAN Card
• Proof of residence (Passport/Driver's license/Voter's ID/Phone or Electricity bill)
• Last three months' statement of bank where your salary is credited
• Last three months' salary slips
• One passport-size photograph

However, do note that the documents needed can change from one lender to the next, so ensure you check with your lender which specific documents will be needed from your end for getting short term loan.

We often face situations where we are in dire need of funds, such as for wedding expenses, school fees, or even medical emergencies. At mPokket, we aim to meet your financial needs and become a part of your life's journey.

That's why, If you are seeking an instant student loan or salaried loan and wondering where to turn for some quick credit, simply download the mPokket online loan app, register by uploading a handful of documents, and post the online loan approval, borrow instant personal loans of up to Rs. 50,000. mPokket instant loans for students and loans for salaried are both credited straight to your bank.

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There's no doubt that loans and other similar such credit avenues are immensely convenient. They let us explore options that otherwise might not have been possible and, in many cases, they're lifesavers. Nowadays, you can even get online loans at the click of a button.

However, there's also the part where the loans need to be repaid with interest. After you've reaped the benefits of the loan, you have to set about the process of repayment. And just as when you got those personal loans online in the event of a cash shortage, you could be faced with similar shortcomings during the phase of their repayment. After all, life can be unpredictable, as we all know by now.

That said, there are ways to offset your loan repayment without having to dig too deep into your precious savings or emergency fund. Here's how:

Take advantage of tax benefits: You can take advantage of loans that offer tax benefits, such as when you take a home loan or an educational loan. Before you go ahead with prepaying some of your loans, be sure to ascertain your cost benefits by doing a post-tax calculation. It might not always be worth your while to hold on to the loans which carry tax benefits.

Make timely use of your one-time or bonus receipts:  When it comes to prepaying your home loans, you could assign some of your one-time receipts from other sources. Not only that, but you could also use them to pay off your credit card debt or personal loans which bear high interest. 

Increasing your EMIs:  As a rule of thumb, your equated monthly instalments (EMI) should increase proportionately as your income increases. However, with the administrative process involved with changing your EMI, it might not always be feasible to do so. But at least try to do it every two years or so and you'll surely enjoy some benefits. 

Prepay using savings: One of the healthier ways to prepay is to put an amount of money every month in a savings plan such as a recurring deposit or debt mutual funds and upon their maturity, you could put it towards prepaying your outstanding bank loans.  The reason this is healthy for your financial well-being is it tends to inculcate in you a tendency for saving and also, you don't end up having to pay a sizable portion of the amount at one go.  

Make a budget and stick to it: As we've discussed previously, a budget is one of the most beneficial tools for keeping your finances in order. Sure, you may be eligible for a loan based on your income. However, what you do with that sum is up to you. Having a well thought out budget will prevent you from going for a heavy loan for a home or vehicle at a time when you could already be juggling some high-interest loans. After all, life can be unpredictable and a budget will help ensure you don't overstep a line that could force you to dip into your emergency funding.

Look at refinancing options:  Many loans offer refinancing options. It entails paying off the existing loan with a new one. It can be paid by the same lender or another. Look at this option only in cases where you've had to borrow at an extremely high personal loan interest rate or those where the tenures are too long. During refinancing, you could change the interest rate, tenure, or both. That said, it involves some charges. 

While these are some strategies that could help you reduce your loan burden, you will have to bear in mind that regular EMI payments will have to be made no matter what. Only then can you keep up a good credit score.  

At mPokket, we offer highly convenient repayment options as well as incentives for timely payments. After all, our purpose is to provide financial independence to youth. So, if you're in need of some quick credit, don't hesitate. Simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and salaried loans are both credited straight to your bank or Paytm account within 10 minutes.

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After the Indian government allowed private companies into the insurance sector in 2000, the sector has seen predictably rapid growth. And with more and more consumers realizing the importance of having insurance, especially now with the global pandemic, the insurance industry is looking to reach even greater heights.

That said, many people continue to see it less as an insurance policy and more as an investment, despite the best efforts of finance advisors against it. So, it's important for you to realize that and treat it as such.

That said, an insurance policy comes with its pros and cons, and it's important to look at both halves of the equation before you begin to use an insurance policy.

Pros of insurance policies

First let us delve into the pros of insurance policies:

Tax benefits: No matter which insurance policy you go in for, you are allowed to claim tax benefits of up to Rs. 1.5 lakh (under Section 80 of Income Tax Act, 1961). This is an important plus for a lot of people.

Coverage for your family in case of your untimely demise: Life can be unpredictable sometimes, and it is important to ensure your family is taken care of in the event of your passing. Having the best insurance policy will provide your family with the necessary help when you are not there to support them.

Benefit of compensation: While any financial loss due to untimely demise is compensated by your insurance, should the unthinkable happen before the tenure is completed, the financial loss covered under the policy can be claimed without having to jump through any major hurdles. It helps cut down on the mental strain following the incident.

Post-retirement financial support: Understandably, there are special insurance policies which are designed to support the individual post-retirement. As you reach the age where you're unable to earn an income, you're still financially taken care of to a fair degree. But it's important to purchase insurance at a young age so as to keep it on the cheaper side in the long run.

Helping a business run smoothly: In any business, due to a number of factors, unexpected losses can certainly occur. Having an insurance can help cover that loss. Also, an insurance policy taken for the employees of that workplace proves them with motivation, and thus smooth operation of the company.

Insurances for specific purposes: Any given insurance, be it for health, home, vehicle, or as applicable, has been specifically designed for that purpose. So, you won't have to deal with a one-size-fits-all situation.

Cons of insurance policies

Long-winded legal formalities: Regardless of the type of insurance you've applied for, you could be in for long-winded legal procedures first by the insurance company before you can claim the money.

Confusing terms and conditions: Often, in insurance policies, stipulated terms and conditions are written in tricky legal parlance such that at the time of claiming the insured sum, you could be denied a considerable amount. Of course, the onus falls on you to read the fine print before signing on, or consult a legal expert to go through it for you first.

Deliberate crimes: Sometimes, the beneficiaries of a given insurance policy could resort to wrongdoing to manually bring about the conditions needed for disbursement of the sum, such as deliberately setting fire to one's property or worse.

Insurance is, by and large, a useful tool to have at your disposal. Life throws unexpected curve balls at us when we least expect, and it's good to have the means to tackle those situations in some capacity, at least. 

Similarly, at mPokket, we realize that despite your prudent financial planning, from time to time, you might face a financial emergency of some form. During those trying times, you'll need a trusted friend by your side, someone who will not just provide moral support but will help you out financially as well.

mPokket is one of the best instant loan apps in India when you need some quick credit. You can easily obtain an instant student loan or salaried loan. Simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant online loans of up to Rs. 50,000! mPokket instant loans for students online and loans for salaried are both credited straight to your bank account within 10 minutes.

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