Which Factors Should you Consider while Choosing a Personal Loan App?

Which Factors Should you Consider while Choosing a Personal Loan App?

Whether it’s for our ever-increasing needs or for any emergent situation, we just can’t avoid the need for extra money. You never know when the need for funds hits you and it may hit you badly at times. It’s now well-settled that a personal loan can be a real saviour in such situations.

Loans have grown exponentially in India in recent times. When it comes to the growth rate of loans, India is ranked 5th among the G20 countries (as mentioned in a survey conducted in 2014). More than 400 million Indian people were estimated to have borrowed money in 2014. But the point to note here is that six out of every seven loan applications got rejected for some reasons or other, as was mentioned in the said survey.

It has been observed that the inherent drawbacks in the traditional credit system are largely responsible for such an abysmal scenario. A large number of people are opting for personal loans today, but the number of rejections is also on the rise with the traditional banks.

This is where money lending apps (more precisely, personal loan apps) have come to fill the ‘void’. Such apps provide instant personal loans online with minimum formalities and thus, fit the emergency financial needs of the borrowers perfectly, thanks to the smartphone revolution. Now you can apply for your much-needed personal loans through these apps and enjoy hassle-free loan application and easy approval, literally at your fingertips! No wonder why personal loan apps are extremely popular among young professionals these days.

What are the factors you should consider while choosing the best app for yourself?

  • Check the eligibility conditions of the app

First and foremost, you should check the eligibility conditions stated by the app before applying for a personal loan through it. Most personal loan apps require the applicant to be salaried and the age limit is kept between 23 to 58 years. Most of these apps also specify a minimum Net Monthly Income (NMI) of Rs 15,000 for applicants to avail their instant personal loans.

  • Check the documentation related to the terms and conditions specified by the app

All reputed personal loan apps exhibit their stated terms and conditions to their potential customers somewhere in their platform. Do not make the mistake of overlooking these details. Do read these details carefully and try to understand your obligations. In case of any doubts, reach out to the provider through their contact information provided. This will help you to ascertain if the personal loan products floated by the app are being offered with a ‘string attached’ or are coming to you with any hidden conditions. This way, you can have a fair idea of the credibility of the provider.

  • Gather information about its customer service 

While looking for the best personal loan app, you should bear in mind that the app should have a good reputation related to its customer service. Try to gather information such as how prompt the app is while disbursing loans, addressing customer queries and providing other related assistance. Some of the personal loan apps have developed virtual assistants such as ‘chatbots’ to provide a better experience to their customers. Check how useful these chatbots can be when it comes to guiding you through the online loan application procedures.

  • Check if you are required to pay any fees upfront

It’s quite normal for most lenders to charge a processing fee (for processing your loan request) up to 2% of your loan amount or Rs 999 (whichever is higher). Some providers may waive processing fees based on particular offers or your credit profile. Check with the app whether it charges any fee upfront in the name of processing fee or any other charges. Clear off doubts, if any, prior to your personal loan application itself.

  • Time taken by the app for processing your loan application

Time is precious for everyone in this fast-paced life.  People have absolutely no time nowadays for running from pillar to post, just for getting some simple things done.  Obtain a clear-cut roadmap from the customer support team of the app as to how much time will be taken by them for getting the approval and disbursal done for you. In most cases, you would be looking for a personal loan to address your urgent needs only. You just can’t afford an app that takes a long time to process your loan application.

You would also do well to esquire beforehand if online uploading of documents is possible with the app. If not, ask whether the app would facilitate collecting the required documents from you or not. Please make sure that frequent visits to the banks are not required and your time and energy are not wasted.

  • Check whether they are able to provide the best possible offers

Check whether the app can provide the best offers from all reputed lenders or not. The best personal loan apps establish exclusive tie-ups with the reputed providers and have access to their attractive offers. Therefore, you stand a great chance to avail a host of offers with the most competitive interest rates. Some lenders provide exclusive ‘app-only’ schemes and provide offers such as processing fee waiver, cash back offers and many more. Keep an eye for such offers before you apply for a personal loan. You may also look for special offers during festivals such as Durga Puja, Diwali and Eid.

Some apps may provide special category personal loans as a part of their periodic offers. These may include bad credit/poor credit loans, personal loans for low salary professionals, personal loan without salary slips and personal loans for students.

  • Security of your data and records

The personal data and records you share with an app while registering with it may look innocuous to you. But, if sent to unscrupulous hands, you may end up landing in all sorts of trouble. Financial fraud is not new to the Indian marketplace and you should be doubly sure about the security of your data before you share it in any platform.

Please try to find out what measures are employed by the app to ensure the security of your personal data and information. Check the security features mentioned in the app to find out if they are practicing the modern security protocols or employing the latest data encryption tools to protect your data.

Many popular banks, fin tech organizations and financial services aggregators in India have launched their personal loan apps these days, to give you a safe and easy experience, whenever you are in need of any financial assistance. Before going with any such app, keep the above-mentioned points handy for reference. These will enable you to make an informed decision.

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