Taking an online loan is now possible and available at your fingertips.
It has become so easy and accessible that some lending platforms can even provide you instant cash within an hour of applying for the loan.
In fact, you do not need any physical documents to bother you. All you have to do is upload the images of your PAN card and Aadhar card, enter your banking details where you want to receive your funds, and you are done.
However, here are some important factors you must consider and think about it before taking instant online loans from your mobile phone.
1. Ask Yourself, Why You Need A Loan
Your reasons for taking the loan should be valid and something which is really important.
For example Unexpected emergencies, Sickness, unexpected travel expenses, etc.
In situations like this, you have not much choice unless someone you know helps you out and so, it is reasonable if you take the loan.
2. Take What You Exactly Need And Not In Excess
Do not take a huge amount of loan just because the loan app gives you a larger amount than you would be needing it.
You will end up paying more and losing money with the interest and fees.
3. Have A Solid Plan To Repay The Loan Back
It is advisable to have a plan beforehand for your loan repayment.
If you are not able to repay it back in time, you will end up paying late fees which can actually amount even almost up to the principal amount of the loan you have taken.
Another impact will be it will lower your cibil score.
4. Read The Loan App Reviews Before Downloading
If you are browsing through the net or searching for loan giving app in the Google play store, read the reviews first.
Search for the negative reviews rather than the positive ones.
In most apps, you will find that those positive reviews are fake and wrong.
If you see such reviews, stay away from them.
You will be able to make out which loan-giving apps are genuine and real and which ones are fake.
5. Do Not Pay Any Fee Or Charges Before Your Loan Is Disbursed
There are many apps in the play store that scammed thousands of people by encouraging them to make a deposit ranging from ₹10 to ₹500 or more even before their application is completed so that they can get a higher amount.
In the hope of getting a higher amount of loan, many people fall prey to it and made the deposit.
They never get the loan and on top of that instead of getting money, they lose money.
Stay away from any app that asks you for any fee or charges before your loan amount is disbursed. They are fake.
Always remember that genuine loan apps or loan providers never ask you to deposit money beforehand.
6. Consider The Interest Rate And Fees
Read all the terms and conditions before taking a loan.
Be very clear about the fees and charges you have to give for taking the loan.
Loans are not free and especially, those instant loan apps charges even up to 50% of the loan amount they provided.
Even if you are in dire need, it is better to look for another source rather than paying almost double the amount of the money you use.
7. Do Not Take A Loan To Repay Another Loan
When you are in need of money and can not repay your existing loan, it is tempting to avail of another loan and repay the pending loan.
Many have done it this way, and the debt cycle continues on increasing and they can not come out of debt nor are they able to repay the loan in time.
Instead of taking another loan to pay the pending loan, try to look out for ways to earn more money by offering your service, doing any freelancing work, selling something, working two jobs, learning any skill which can bring you money in return, do anything that can bring money into your bank account rather than emptying it.
8. Repay Your Loan On Time
Know exactly when and how much time you have to pay back your loan and plan your finances according to it so that you can avoid being caught with additional late fees or charges.
9. Know The Repayment Process For Your Loan
Sometimes, you can face problems with your loan repayment process which can cause a delay in updating the loan you have repaid and as a result, you are charged a late fee for no fault of yours.
Most urgent cash loan apps allow you to transfer wallet money or do a bank transfer for repaying your loan.
Make sure you know exactly what is required to repay your loan before your loan due date so that you can give yourself time to prepare to repay.
10. Make Sure Your Loan Repayment Is Updated Instantly
After you repay your loan, make sure the same is updated in the app.
If it does not, immediately contact customer care support and raise a complaint. Have proof of payment by taking a screenshot of the successful payment you have done.
11. Be Aware Of The Penalty If Your Loan Is Not Repaid On Time
Normally, if you fail to repay your loan on time, most loan services will require you to pay a late or extension fee that make your quick loan more expensive.
However, if you fail to pay your loan back at all, it is mandatory for RBI registered lenders to report any defaulters of loan to the Credit Information Bureau India Limited (CIBIL).
Once your delinquency is reported in Cibil, it will affect your credit score and will have an impact on taking the next loan in the future.
This will also make it hard for you to avail loans from traditional banks.
So, take these loans when you need it urgently and there is no other option for getting the money you need.
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