Mini Loans: All You Need To Know about small personal loans

Need quick cash to cover an emergency expense or a short-term financial gap? Mini loans, also known as small personal loans, offer a fast and hassle-free solution. These loans typically come with minimal paperwork, quick disbursal and flexible repayment options, making them ideal for urgent financial needs. Before you apply, it is essential to understand how they work, their benefits and the potential risks involved.

What are Mini Loans or Small Personal Loans?

A mini loan or small personal loan is a short-term loan that helps people cover urgent expenses. It is unsecured, meaning you don’t need to provide any security or collateral. These loans are easy to apply for and get approved quickly with minimal paperwork. The best part about a mini loan is that you can use it for anything you need, like medical emergencies, home repairs, travel, or buying appliances. It is a flexible option when you need funds fast.

Repayment is also simple. You can choose a tenure that suits you, usually between 12 and 72 months. A longer tenure means smaller monthly payments (EMIs), but you may pay more in interest. Since this is a short-term loan, the amount you can borrow is usually between Rs 5,000 and a few lakhs.

Get Instant Loan Up To Rs.50L

Mini Loan or Small Personal Loan: Eligibility Criteria

1. Who can apply?

• Salaried employees: People working in private companies, government jobs, or multinational corporations


• Self-employed professionals: Doctors, lawyers, chartered accountants, consultants, etc.
  Business owners

2. Age

• Salaried individuals: 21 to 60 years


• Self-employed professionals: 23 to 70 years

3. Income requirements

• Salaried individuals: Minimum monthly salary should be Rs 15,000 to Rs 30,000


• Self-employed professionals: Minimum annual turnover of Rs 15 lakh


• Business owners (non-professionals): Minimum annual turnover of Rs 40 lakh

4. Work experience and stability

• Salaried individuals: At least 2 years of job experience, with 1 year at the current job


• Self-employed professionals: At least 5 years in business

5. Others

• Minimum profit: Rs 2 lakh per year for self-employed professionals & proprietorship firms; Rs 1 lakh for non-professionals.


• Credit score: A good CIBIL score (usually 700 or above) improves approval chances and lowers interest rates

* Please check with the specific lender you are applying with for specific details on the eligibility criteria.

How to apply for a Mini Loan or Small Personal Loan

1. Visit the lender’s website or app: Go to the official website or mobile app of the bank or financial institution offering small personal loans.


2. Check eligibility: Enter basic details like your age, income, job type (salaried/self-employed), and loan amount to see if you qualify. Some lenders also provide an instant eligibility calculator.


3. Fill out the loan application: Provide your personal, employment and financial details. Choose the loan amount and repayment tenure that suits you.


4. Upload required documents: Submit scanned copies or photos of your KYC documents, income proof, bank statements, and any other required papers. Many lenders offer a paperless process.


5. Loan approval & verification: The bank will review your application and check your credit score, income, and repayment capacity. This process is usually fast and some lenders offer instant approval.


6. Accept loan offer & get disbursal: Once approved, review the loan terms, agree to the terms and conditions and authenticate the process via OTP or digital signature. The loan amount is then credited to your bank account, often within a few hours.

Mini Loan or Small Personal Loan: Benefits

• No collateral required: You don’t need to pledge any security or asset to get a small personal loan, making it an unsecured and risk-free borrowing option.


• Quick & easy approval: Most mini loans are approved instantly if you meet the eligibility criteria. Some lenders even offer pre-approved loans for existing customers.


• Fast disbursal: Once approved, the loan amount is credited to your bank account within a few hours, ensuring you get funds when you need them the most.


• Flexible loan amount: You can borrow as little as Rs 5,000 or go up to a few lakhs, depending on your needs and eligibility.


• No end-use restrictions: Use the money for anything - medical emergencies, home repairs, wedding expenses, travel, education, or even shopping.


• Simple documentation: The loan process is paperless and hassle-free, requiring only basic documents like ID proof, income proof, and bank statements.


• Flexible repayment options: Choose a repayment tenure between 12 and 72 months. A longer tenure reduces your EMI burden, while a shorter one helps you save on interest.


• Competitive interest rates: Interest rates are lower compared to credit cards or payday loans, starting as low as 10.5% per annum (varies by lender).


• Improves credit score: Timely repayment of a small personal loan boosts your CIBIL score.

ALSO READ: Emergency loan apps: Check Pros and Cons before borrowing

To conclude, mini loans or small personal loans are a convenient option for managing urgent financial needs, offering quick approval, flexible repayment options, and no collateral requirements. Through the online lending platform of Moneycontrol, you can access personal loan offers of up to Rs 50 lakhs from eight lenders, with interest rates starting at 10.5% per annum. The entire application process is 100% digital, making it fast and hassle-free.