Advance Cash Loans: Features, Benefits, and Documents Required
Financial institutions in India often facilitate short-term funding by offering cash advance loans. This loan aligns with your regular credit cards. Some of the recognised credit card companies ensure that their customers can avail cash advances instantly through their credit cards at the nearby ATMs.
Most probably, you’ll have to pay a charge for the cash offered by your credit card provider. Additionally, if you do not pay back the money before the succeeding billing cycle, you’ll be charged interest. Keep reading to know more!
Features and Benefits of Cash Advance Loans
Since these loans fall under the category of unsecured loans, they are collateral-free. They are suitable for personal usage and urgent financial needs. Know more about the advantages below:
1. Instant Approval
Such loans are available for a short tenure. Once your loan amount gets approved, it is quickly transferred to your bank account. Cash advance loans start at Rs. 10,000 in India, wherein you can repay the amount via 1 to 6 instalments. That said, the terms and conditions of these loans vary across different lenders.
2. Minimal Formalities
The loan tenure usually ranges from 30 days to 180 days. This facility is quite similar to a payday loan, except for the fact that cash advances don’t require single repayments on paydays. You can avail a cash advance loan online through an easy and streamlined procedure. You do not need to fill in lengthy forms or wait for extended approvals.
3. Easy Access to Funds
You can fill out the application form from the comfort of your home and check your loan approval status online. Your lender will credit the fund to your bank account through an electronic transfer.
Cash Advance Loans Details
| Loan Amount | Up to ₹20 Lakh |
| Interest Rate | 9.9% to 45% p.a |
| Foreclosure Fee | Nil |
| Tenure | Up to 72 months |
Eligibility and Documents Required for Cash Advance Loans
Go through the following chart to know about the eligibility criteria for these loans:
| Factors | Requirements |
| Nationality | Indian |
| Age Limit | Above 23 years |
| Bank Account | An applicant must have a salary bank account |
| Monthly Income | Rs. 30,000 to Rs. 50,000 (This amount may vary based on your city and lender) |
| Documents Needed | Proof of income, for example, previous six months’ bank statement and previous three months’ salary slipProof of address such as ration card, utility bills, Aadhaar card, etc.Proof of identity such as voter ID, driving license PAN card, etc.Three passport size photographsLenders may also ask for your last organisation’s Form 16, relieving letter, employee ID and offer letter. |
Disadvantages of Cash Advance Loans
You are already well-acquainted with the pros of these loans. Let’s know the cons as well!
1. Chances of Debt Trap
Using such loans frequently can land a person in a debt trap, wherein he/she will end up paying the processing fee, interest rate, late payment charge (if any), along with the principal amount. So, you should only apply for this loan when you have the ability to repay it on time.
2. Involves Higher Payment if your Loan Tenure is Long
If you select longer repayment tenure, you’ll have to pay more interest. The rate of interest on such loans is usually higher compared to other forms of loans. In addition, if you miss an EMI payment, your credit rating drops and your lender may impose a hefty late payment penalty.
Alternative to Advance Cash Loans
An instant cash loan can be a better way of availing cash during an emergency. This is because it offers more attractive interest rates with flexible repayment tenures. Financiers such as Navi provide urgent Personal loans up to Rs. 20 lakh at a starting interest rate of 9%.
The loan tenure can range up to 7 years. Follow the steps for a fast cash loan application to avail a hassle-free instant cash loan with minimal documentation.
- Download the Navi app.
- Register using your cell phone number.
- Provide your personal information to check loan affordability.
- Enter your loan and EMI amount.
- Finish the KYC process using your selfie, Aadhaar card and PAN.
- Avail online fund transfer facility using your bank account details.
Once your loan request gets approved, you’ll get the funds in your bank account within minutes.
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Final Word
By getting a instant cash loan you can get easy access to funds during a crisis. However, you must check the interest rates, processing fee, quantum of loan and other relevant aspects before choosing a lender. Most importantly, use an online EMI calculator to compare the loan cost of unsecured loans.
FAQs
Ans: In case you have applied for a cash advance loan on a weekend, your lender will most probably disburse the amount on the next working day. When the weekend is a working day for the banks, you may receive the money on the date of approval without any delay.
Ans: You will not get any special concessions on advance cash loan interest rates. The applicable rate will be based on your credit history, repayment capacity, eligibility terms, debt-to-income ratio and net monthly income.
Ans: In case you’re new to borrowing, a lender may consider your application, provided you satisfy the eligibility requirements. Financiers will verify whether you have a job and a stable income. Besides, they may require a CIBIL score of at least 600.
Ans: The debt-to-income ratio denotes a relationship or comparison between a person’s monthly payouts (borrowings or debts) and monthly income. It reflects whether a person has the capacity to repay his/her debt instalments with ease.
When this ratio is high, it creates financial pressure of debt repayment and reduces your credit rating. Additionally, it becomes difficult for you to avail loans in the future.
Ans: Only a salaried person (having a salary account) can opt for an advance cash loan in India. So, individuals receiving salary in cash are not eligible. Any amount in the form of commission, which your bank account doesn’t reflect, will not be eligible under your net income. You must submit your valid proof of income while availing this loan. That said, the eligibility requirements vary from one lender to another.
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