A Comprehensive Guide on Types of Instant Loans

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Are you planning to apply for an instant loan but curious about which type to choose? Whether it is for a vacation, an emergency, or a big purchase, instant loans can help you get the cash you need in no time. 

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There are various types of instant loans curated to suit different financial needs. In this guide, we will walk you through the various categories of instant loans available, so you can pick the one that suits your needs the best.

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What Are the Different Types of Instant Loans?

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Here is a list of different types of instant loans:

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1. Pre-approved Instant Loans

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Imagine getting a loan in just a few clicks—no waiting, no hassle! Banks and financial institutions pre-assess the income, age, and credit score of reliable customers to offer pre-approved personal loans. 

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Pre-approved instant loans are designed to save time and can often be approved entirely online. 

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For example, if you are a salaried professional planning a quick vacation, a pre-approved loan could get you the funds instantly without the stress of lengthy paperwork. It is no wonder they are so popular among working professionals!

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2. Short-term Personal Loans

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Short-term personal loans are the go-to choice for those seeking instant cash. They are super easy to apply for with a fast-tracked process where document verification happens almost immediately. 

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In fact, some digital lenders even skip the paperwork altogether. Loan amounts can vary widely, from ₹20,000 to ₹40 lakh, depending on your creditworthiness and eligibility. 

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For example, if you need funds to plan a destination wedding or cover unexpected medical bills, a personal loan could be your lifesaver.

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3. Top-up Loans

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A top-up loan is an additional loan you can take along with your current car loan, home loan, or personal loan. 

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Its loan application process is super quick because the lender already has your documents from your previous loan. All you need to do is wrap up a few simple formalities. 

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For instance, a top-up loan can help if you already have a home loan and require funds for renovations, saving you the trouble of starting over. 

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4. Loan or Overdraft on Fixed Deposit (FD)

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Need instant cash without breaking your FD? A loan or overdraft against a fixed deposit is one of the quickest ways to get funds. 

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Banks and financial institutions can lend you 70-95% of your FD's value, keeping your savings intact. 

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For example, if you have an FD worth ₹5 lakh and need ₹3 lakh for an emergency, you can easily secure the amount without prematurely withdrawing your deposit.

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It is a smart way to manage urgent finances while letting your FD continue earning interest. 

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5. Overdraft on Salary

You can turn your salary account into a financial safety net with an overdraft facility. 

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By getting a pre-approved limit, you can withdraw extra funds whenever you are running low, up to the set limit. 

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As soon as your salary is credited, the overdraft amount is automatically repaid. 

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For instance, if you need extra cash mid-month for a sudden car repair, you can overdraw from your account without any hassle. 

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It is a seamless way to handle short-term financial crunches.

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6. Loan on Credit Cards

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If you use a credit card, you might have access to a quick and convenient loan option! Your eligibility depends on factors like your credit score and how well you have managed your repayments. 

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Once approved, the funds are transferred to you in no time with minimal processing. For instance, if you need urgent cash for medical expenses, a loan on credit card can be a lifesaver. 

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7. Loan on Insurance Policy

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Did you know your insurance policies could help you get a loan? 

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If you have investments in policies like car insurance or health insurance through your bank, you could qualify for a loan against your insurance. 

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This type of loan, often called a demand loan, is becoming popular with many banks and NBFCs. 

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The loan amount you can borrow, up to 90% of your policy’s value, depends on factors like the maturity value of your policy and how well you have kept up with repayments. 

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The Bottom Line

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Understanding the types of instant loans can help you make informed decisions to manage your financial needs efficiently. 

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Whether it is a pre-approved loan, a top-up option, or even a loan against your FD or credit card, there are plenty of choices to suit different situations. 

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So, if you want cash without the stress, you can get an instant loan at Jar App and sort your finances in no time. 

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Frequently Asked Questions

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1. Can I get a loan against my fixed deposit (FD)?

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Yes, you can take a loan against FD without breaking it. Banks usually lend you a certain portion of the FD value to meet your financial needs while your deposit continues earning interest.

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2. How can I get a loan on my credit card?

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A loan on a credit card is offered based on your credit score and repayment history. Once approved, the funds are disbursed quickly, making it an ideal option for urgent needs.

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3. How do you calculate the EMI for an instant loan?

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The EMI for an instant loan is calculated in the same way as for other loans. It depends on factors such as the loan amount, repayment tenure, and interest rate. A longer repayment period means you will have more EMIs to pay.

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