Using A Loan App To Get A Loan? Read This First
Lending or loan apps are quite popular among smartphone users wanting access to a quick source of funds. But what are they, and how do they work? Let’s find out.
What are loan apps?
As the term suggests, these are apps that approve and disburse loans. You merely need to install the loan app on your smartphone and follow the application process outlined on it. The loan application is processed if your personal and financial credentials check out satisfactorily. Thereafter, the loan amount is disbursed to your savings account.
Loan apps have increasingly gained prominence over the last few years, owing to the ease and convenience they offer. But if you have never used one to get a personal loan, please read the following points before you do:
● It costs nothing to have the app on your phone.
Online loan apps are like any other app on your smartphone. They work when clicked on, and there are no installation or maintenance costs. If you don’t need it, you can simply uninstall the app. Like other apps, you must periodically update lending apps to include new features, remove bug fixes (if any), etc.
● The app fronts an NBFC registered in India.
Most people wonder, ‘Who owns this lending app? Who finances my instant loan request?’ The answer to these questions is: Loan apps are fronts for NBFCs (Non Banking Financial Companies) registered by the RBI in India. It is important to ask these questions, and to find out the name and credentials of the NBFC backing the app. Those who are desperate to get their hands on some quick money may not perform these background checks, but it is important to do so — especially in the light of several unscrupulous apps that were discovered doing business in India in the year 2019 and 2020, without proper licenses and registration.
● It requires minimal documentation — and you can upload the lot online.
Every part of the process, be it checking loan eligibility to repaying the monthly loan instalment, is done on the app. At no point are you expected to submit paperwork to the app’s branch office, or go there to submit processing fees. Also, the app has a simple and minimal documentation process. Traditional lenders like banks and some NBFCs have a long list of documents for applicants to sign and submit before the application is processed, but not so with good lending apps. The app asks for a few documents (income proof, personal ID proof, photo ID, residence proof and bank statements) in all. Self-attest the copies and upload them directly on the app.
● It offers competitive rates of interest and processing fees.
Leading lending apps in India offer the most competitive interest rates and processing fees. Not only are they flexible in terms of documentation processes, but they accept all payments online, from processing fees to monthly loan repayments/EMIs. In case you default on any EMI, you are given up to seven days’ grace period but the app levies a penalty for late payment post the grace period. Do note that your interest rate may be hiked if you default on multiple EMIs. Do check the interest rates and your personal loan eligibility on the app before you proceed to apply for the loan.
● The app answers all queries and has every information laid out.
Though you deal with a faceless entity such as a loan app when taking the instant loan, leading apps do not leave customers to fend for themselves without adequate information and support. The best apps detail every aspect of the personal loan offering, in an easy format that anyone can navigate. Besides, you can always request for more information by emailing the app as directed in the ‘Contact us’ section. Do not proceed to apply for the quick loan unless you have all your queries answered to your satisfaction.
Conclusion
Loan apps make it easy to get a large amount of money in quick time, using just a smartphone and your personal documents.