Top 10 Questions To Ask Before Taking A Personal Loan From App

Personal loans are considered an instant credit source that allows you to finance small or big purchases and meet planned or sudden expenses. A report by CRIF High Mark shows that small personal loans of less than Rs. 1 lakh have contributed approximately 50% of the overall personal loan segment in the industry. 

These loans are growing in popularity with digital transformation in the finance industry. Following borrowers’ digital footprints, lending institutions can offer the best pre-approved personal loan offers based on their financial standing and credit behavior. Nowadays, you can apply for a personal loan using the mobile app of lending institutions. Here we will discuss what loan seekers should know before applying for a personal loan online. 

Important Questions to Ask Before Applying for a Personal Loan

Instant loan apps provide a convenient way to apply for a loan anytime and anywhere with minimal paperwork. It needs you to sign up with a KYC document and meet the eligibility criteria to approve your loan application. Like many, you can also use personal loan apps as an informed user. Find important questions to ask before taking a personal loan using the apps below: 

• Is the institution reputable in the industry?

Loan applicants considering an app should look at the background of the lender. Find out when the institution launched its instant loan app. Know about the establishment of the lending institution. It should be an app of a registered company offering an online personal loan. Apply for a loan if it has been serving clients for many years as a reputable organization. 

• Is it a reliable source to download the app? 

Ensure that you download a loan app from a reliable source only. Existing clients of a lender often post reviews on Google Play/Apple Store or the lender’s official website. It is worth paying attention to the feedback of existing clients to know about the lender’s service quality and the safety of its app.

• What type of data will the app access? 

When you install an instant loan app, it will ask you to access your data. It should ask for limited personal data only. You can grant access to the gallery as you need to take pictures of necessary documents and upload your scanned KYC documents. Also, you can allow it to access your location. It is wise to avoid apps that need access to your financial data.

• What amount do you require?

With leading non-banking financial companies (NBFCs), you can apply for a personal loan of up to 25 lakhs which is high enough to meet your different financial needs. Ensure that you do not apply for a high loan amount unnecessarily. Gauge your financial situation and requirements before taking a personal loan from the app.

• What is the time required for loan disbursal?

Most lenders deliver funds electronically on the same day of loan approval or the next business day. If you need quick money, select a lender’s app facilitating fast processing for a personal loan. Apply with minimal documentation.

• How long will I have to pay it back?

Check if the loan repayment tenure is suitable for you. Renowned lenders offer personal loans with a flexible repayment tenure. You can choose a tenure from 12 -60 months to repay the loan.

• What are the documents to be uploaded?

Most lenders provide personal loans with basic KYC and income documents. Check what documents you will need to upload to make an application for a personal loan. Apply online after doing your homework.

• What will be the applicable interest rate?

Interest rate is a factor of your credit score, loan term and borrowed amount. The personal loan interest rate depends on your eligibility, prevailing rates of the financial institution and other factors. Your excellent credit score and the shortest possible and most convenient repayment term can reduce your interest rate. You can check the current rates on your preferred lender’s website.

• What will be affordable EMI?

When applying for a personal loan, you can choose a convenient repayment term to pay EMIs promptly. Look at the flexibility offered for the loan tenure and choose that works best as per your income and cash flow. To reduce the EMI burden, NBFCs allow you to choose a tenure between 12-60 months.

• Do you have the required credit score?

Make sure you have the required credit score to meet the personal loan eligibility criteria set by the lender. Usually, 750+ is considered a good credit score to increase loan approval odds. 

Conclusion

Considering these aspects, you can make an informed decision to take the best personal loan at an affordable interest rate. Individuals seeking easy access to credit via personal loans prefer leading NBFCs offering high loan amounts. One of the leading NBFCs, Fullerton India, offers a Personal Loan of up to 25 lakhs depending on the applicant’s eligibility.

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