Missing an EMI payment can impact your credit score. Consider a payday loan instead

Deepak wanted his bank to lend him a small amount of Rs. 30,000. But as the amount was less and his bank provided loans for larger amounts, Deepak ended up borrowing a much larger amount than he actually required. He opted to repay the loan in 12 EMIs. He earned well and had no problems paying the previous loans he took from various lenders. However, last month he lost his job during the ongoing slowdown and, therefore, defaulted on his EMI payment.

“As you have missed an EMI payment, it will affect your CIBIL score and will also be reflected in the credit report. That said, if you need a small amount don’t opt for loans on EMIs as it requires a greater financial discipline. In such cases, you can opt for instant payday loan, a short term way to get fast cash until you get your next paycheck,” his father told Deepak.

What is an Instant Payday Loan?

Instant payday loans are exactly what they sound like -short term loans until you get your next paycheck or salary. The basic requirement of these loans is that the borrower should be salaried so that he can repay the entire amount as soon as he receives his salary. That is why there are also known as check advance loans or cash advance loans. They are unsecured loans and disbursed instantly. Their approval process is also hassle-free and once you are approved, you will get the money deposited into your bank account instantly. You’ll then need to pay back the loan in full plus the interest rate by in a single payment by its due date. Instant payday loans, however, do not exceed your salary amount, the principal sum is itself a portion or part of the borrower’s paycheck. If you’re looking to borrow mini-loans at competitive interest rates, another viable option is the Pocket Personal Loan available on Bajaj Markets, which offers you lightning fast disbursals of amounts ranging from Rs.10,000 to Rs. 50,000. With attractive interest rates and a completely Do-It-Yourself online process, convenience and flexibility are at your beck and call!

How Payday Loan Protects Your Credit Ratings

Getting back to payday loans, while many may consider the short repayment period of payday loans as a shortcoming, it is an advantage that helps in protecting your credit rating. For example, if you apply for an installment loan, you get one or two years to repay the amount. Recurring payments can be handy, but it is risky. The future is unpredictable and anything can happen within that duration. Like Deepak, you can lose your job and source of income or fall sick due to any illness before the repayment of the borrowed amount. If you lack an alternative source of income, you will eventually end up missing installments. Missing EMIs or defaulting on loan will have a negative impact on your credit score and this is something that you wouldn’t want to happen.

A payday loan, however, is a quick and hassle-free management of your financial emergencies. You can avail the amount you require within hours even with bad credit ratings and no collateral. The amount can be borrowed for any purpose as long as you agree to repay it with your next salary.

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Benefits of Instant Payday Loan

• Less documentation:

Availing an instant payday loan is an easy process and do not require much documentation. The only criteria to apply for a payday loan is a stable source of income. If your income source is consistent and verifiable, it’s enough proof to the lender that you can repay the amount.

• No collateral:

You do not need any collateral to get a payday loan. You may be charged financing or processing fees for the loan, a small amount in the form of an up-front, flat fee. Unlike traditional loans, you do not have to put your assets up as collateral to back payday loan. Similarly, personal loans, available on Bajaj Markets, also don’t require any collateral and are disbursed instantly. Payday loan may be more convenient but personal loans, available on Bajaj Markets, are lighter on the wallet.

• No Impact on Credit Score:

While conventional loans become a part of your credit history, payday loans leave no footprints on your file whatsoever. Therefore, a payday loan will not harm your chances of getting credit in the future.

• No Search of Your Credit File:

If you have a poor credit score, you cannot qualify for a traditional loan. However, people with bad credit rating can also get approved for payday loans as long you can prove your ability to pay it on time.

• Multipurpose:

Instant payday loan, can be taken for every purpose where immediate funds are required. You can use it for anything, including your weekend trips, household expenses, shopping, etc.

Instant payday loans are excellent tools for managing your personal finances. They not only save you from recurring payments and penalties imposed on missed EMIs, but ensure that you be in debt only for a few weeks and not for a longer duration.

If you have a poor CIBIL score, you cannot qualify for a traditional loan. However, people with bad credit rating can also get approved for payday loans as long you can prove your ability to pay it on time. You can also check CIBIL score for free using our smart financial health check tool.