Home›Learning Center›Is "Instant Approval" A Myth? The 2025 Truth About Fast Personal Loans In India

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LoansJagat Team

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27 Jun 2025

Is "Instant Approval" A Myth? The 2025 Truth About Fast Personal Loans In India

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Samriddhi is 32 years old. She is a marketing executive. She needed ₹75,000 at short notice to cover her mother’s hospital bills. She searched online. Her simple web search revealed multiple options that claimed “instant approval” and “loan in minutes.”

Trusting the promise, she applied through a popular loan app. Within two minutes, she received a message that said her loan was “approved”. But the money never reached her account. After two days of silence, she got a rejection SMS citing internal reasons.

A situation like Samriddhi is becoming increasingly common. Most salaried and self-employed individuals rely on digital loan platforms, particularly when urgent funds are needed. But are these loans really instant? Or is it just another buzzword used in advertisements?

What Is “Instant Approval”?

When loan providers use this term, they generally mean a quick preliminary check and not immediate cash in your bank account.

Some platforms do offer quick responses. However, the final disbursement depends on several steps that might need time.

Key steps in the process:

Steps	What Happens?	Details
1	Fill out the form	You submit your loan request.
2	Basic checks	The system quickly reviews if you meet the basic conditions.
3	Share your documents	You upload the required documents for verification.
4	Credit review	The lender looks at your credit score, current EMIs, and repayment history to judge your risk.
5	Confirm the terms	If everything is good, you review and sign the agreement digitally.
6	Money is sent to your bank	After everything is approved, the loan amount is transferred to your account.

Common Reasons Why “Instant” Isn’t Always Instant

Even if you meet the criteria, delays can happen due to:

Your incorrect or mismatched KYC details

You might face issues while uploading a bank statement

Your unclear income proof or unstable job history

Your low credit score or high current obligations

You might face technical verification errors during document reading

How Fast Are Personal Loans In Reality?

Loan Type	Common Approval Time	Common Disbursal Time
Pre-approved loans	5 to 15 minutes	1 to 24 hours
Salaried applicants	1 to 3 hours	1 to 2 working days
Self-employed applicants	3 to 6 hours	2 to 3 working days
App-based loans	<30 minutes	24 to 48 hours

Misleading Beliefs Around Fast Loans

You might have read various eye-catching phrases on different platforms. They form wrong expectations for you.

1. “Money in 5 minutes.”

The approval of these platforms might be quick and automated but the actual crediting of funds depends on:

Backend systems

Agreement signing

Verification

2. “No paperwork required.”

Your loan journey might be paperless, but you still need to submit digital versions of documents. Generally, lenders ask for:

PAN

Aadhaar

Salary slips

Bank statements

3. “Guaranteed approval.”

No financial product can promise this. You might know that even pre-approved offers can be withdrawn after detailed verification.

4. “Credit score doesn’t matter.”

Most fast loan platforms still check your score before confirming approval. Only a few offer very small ticket loans without it.

What Factors Do Lenders Check Before Final Approval?

Factor	Reason
Credit score (CIBIL)	It reflects your repayment behaviour.
Income level	It determines your repayment capacity.
Job or business stability	If you switch frequently, then it raises red flags.
EMI obligations	Your EMI-to-income ratio should ideally be under 40%.
Existing loans	More loans mean more risk for lenders.

Comparison: Same Loan, Different Experiences

Now, we will look at the case of two applicants, both applied for ₹1,00,000.

Criteria	Sneha (Salaried)	Nimesh (Self-employed)
Monthly income	₹50,000	₹70,000
Credit score	745	660
Other EMIs	₹7,000	₹18,000
Approval time	12 minutes	3 hours
Loan credited in account	5 hours	30 hours

You can see that Sneha’s application was processed faster due to her better score and lower obligations. Nimesh is earning more. However, you can see that due to his existing EMIs, his approval got delayed.

Final Thoughts

You cannot say that “instant approval” is a lie. But it is not a guarantee of instant cash either. It simply means that the platform will use automated systems for quicker decision-making. The full process from eligibility to money in hand still depends on your:

Profile

Credit history

Correct documentation

If you are sure that you are prepared and your credit report is clean then you might get your loan within a few hours. But if you think that money will be transferred instantly without fulfilling requirements then you are dreaming.

FAQs

1. Are pre-approved offers guaranteed?

No. They have to go through basic checks before disbursal.

2. Are digital loans cheaper than bank loans?

Usually no. They are quick but may carry higher interest rates and fees.

3. Is it possible to get a personal loan within 5 minutes?

Approvals may happen in 5 to 15 minutes, but actual credit often takes longer.

4. How soon will money be credited after signing the agreement?

Generally under 1 working day. It depends on your lender.

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About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?