3 Things To Know About Personal Loan Apps
Lately, most people in need of quick cash have been making a beeline for personal loans. There has also been a corresponding increase in the use of loan apps to get quick loans, brought on primarily by COVID-related lockdowns and lenders shifting their products online.
Are you about to use a personal loan app for the first time? Do note these facts first:
#1 The app fronts a registered NBFC in India.
Most people are confused about who owns the instant personal loan app, who runs it, how the money is processed, etc. For the uninitiated, the loan app is a front for an NBFC (Non Banking Financial Institution) registered in India. Only those NBFCs and apps registered in India can transact business in the country, so you should check the app’s credentials before downloading it. The NBFC simply finds an easier and faster way to connect with customers and offer its personal loan and credit line products on a digital platform via the loan app.
#2 The app has the same checking and approval processes as other lenders.
You would (mistakenly) believe that since you’re using a smartphone app that is fun and easy to use, the instant personal loan will be disbursed instantly and without any documents. Indeed, some apps do advertise that their loans can be availed without documentation – steer clear of these. Whether you take a small loan from an app or a bank, every lending institution in India is legally mandated to follow strict background and credit score checks before approving personal loans. The app checks your credit score, and goes over your documents thoroughly but quickly. The best ones also use their own AI-backed algorithms to check your credit worthiness, which is an extra layer of authentication. If your credit score is found lacking, the application is rejected but you are allowed to reapply a few months later with a better score.
#3 The app offers a fully-digital UI for the loan.
The biggest advantage of applying for a small loan on an app, is that you can carry out the entire transaction from the comfort of your home. Where a bank or NBFC would have you go to the branch office to submit your documents, hand over the processing fees and collect the loan cheque, the app allows you to apply and get the loan money online. You can upload the documents on the app, pay the processing fees, accept the loan amount and repay the loan – all digitally, without any paperwork or trips to the loan office. The loan app offers ease of use and convenience that other lenders do not.
Conclusion
Using a loan app to get a personal loan is simple, quick and convenient. However, you should be aware of the app’s credentials and reliability before you start using it. A little research about the best apps in India will help you narrow down your search and find the one that suits your needs the most.
