A personal loan makes it possible to realize a long-cherished dream, make an expensive purchase, or even finance an emergent requirement. However, if you are a first-time applicant, you might be confused about the utility of the loan and whom to borrow it from. This blog addresses these questions.
Why apply for an online personal loan?
Though all lending institutions in India offer personal loans, it is always more prudent to apply for a quick cash loan from a leading loan app. If you are on the fence about borrowing the loan from a traditional lender such as a bank over a new-age loan app, let us tilt the balance in favor of the latter with these benefits:
- You can study the loan product online in its entirety – the app lists all the relevant details and has a quick response time to assist customers during the app journey.
- A loan app offers a fully digital interface for the product – from application to repayment, everything is digital, with a few clicks on your smartphone. If you were to apply to a traditional lender, you would have to go through lengthy, tedious paperwork.
- Since you can apply for the loan online, there is no need to submit your paperwork or the processing fees cheque at the lender’s branch office. This saves time and effort, especially when you need the loan for an emergency.
- A traditional lender may offer you a pre-approved loan, but do note that you must still submit paperwork and undergo a lengthy approval process. Meanwhile, loan apps take a fraction of the time to approve the loan application than a traditional lender. India’s best cash loan apps have stringent credit check processes and their own uniquely devised, AI-backed algorithms that check your financial behavior and creditworthiness. However, these checks are performed quickly – from the time of application, you get the loan approval in just a few hours, with disbursal following soon after in a few minutes.
- Loan apps are also more flexible about allowing those with low credit scores to reapply for the loan – you can do so after three months, provided your credit score has improved.
- The best loan apps incentivize repeat borrowing – you are rewarded with lower interest rates on your second or third application with the app. You also get incentives for referring your friends to the app, provided their inquiry converts into an actual borrowing. Traditional lenders do not offer these incentives.
What you need to know before applying
First-time applicants need to read this section carefully. It lists the points they should be aware of before applying for a personal loan:
- The loan is offered subject to a good credit score (over 750 is ideal on the CIBIL rating scale), steady employment with a Government or private concern, and proven repayment ability. If your credit score is low, you should improve it before you apply.
- It is better to close older loans before applying for a personal loan. The more EMIs you contend with through multiple loans, the lower your repayment ability becomes. Lenders are skeptical about disbursing unsecured loans to those with various borrowings to their name.
- However, a cash loan from a good loan app can help you consolidate debt. This streamlines your debt considerably and aids better financial management.
- The documentation process is straightforward with a loan app. But you must ensure that all the information mentioned in the documents is correct and updated. If not, please update your records before submission, or they will undoubtedly be flagged during the checking process.
- You have the freedom to foreclose the quick cash loan – no need to wait out its entire repayment tenure. Early closure saves a lot of money on interest. It also increases your credit score.
How to apply for a personal loan on an app
- Download your preferred loan app (check its credentials and ratings before you do) and set it up as directed. This entails creating a profile with your personal and income information.
- Peruse the section on personal loans on the app. Understand all terms and conditions of the product, such as interest rates, processing fees, documents required, tenors, eligibility criteria, repayment modes, etc.
- Apply for the loan by uploading your documents on the app as directed. Give the app time to check your credit score, income, and documents before notifying you about your eligibility and loan approval.
- Once approved, the loan is disbursed in mere minutes. The loan money is disbursed to your savings account. You can withdraw it immediately for use.
- Repay the loan in EMIs every month either by auto-debit or on the app’s account via NEFT/IMPS.
Conclusion
The process of applying for a loan online should be hassle-free and easy so that even first-time users can do it. Once you have applied for a cash loan online, you will prefer borrowing money this way for emergencies.
