The digital lending platform has a huge contribution in the popularity of personal loan, which has made the process of taking loans very easy and fast. Earlier, where long lines, a lot of papers and banks had to make many rounds, now after the launch of the instant loan app, the entire process of loan has become very easy.
However, the arrival of Quick Loan App has also created many types of financial risk for borrowers with different needs. In such a situation, the question arises whether it is safe to apply for online instant loan? What should you know before tapping on the “Apply” button? Let’s know!
Instant loan
Instant loans can prove to be very helpful in meeting emergency funds or cash needs. These include all the conditions from medical emergency or home repair.
You can take 100% digital and instant personal loan of up to Rs 50 lakh through moneycontrol. Through this, with any paperwork and low processing fees, you can get fund transferred to your bank account immediately. Its process is quite easy – enter your details, complete KYC verification and set your EMI repayment plan. For this, Moneycontrol has partnered with 8 lenders. Personal loan interest rates begin at 10.5% annually.
It is advisable to rely on traged platforms like Moneycontrol to take personal loan. Many risk has also arisen due to the increase of instant loan apps, which you should take care of before applying for online personal loan.
Risk related to instant personal loan
Financial stress and more debt: One of the biggest risk of instant personal loan is the greed to take more than the need. Easy process of application and immediate approval can encourage to borrow without thinking, due to which the loan may not be repaid on time. Therefore, only borrow as much as you can easily pay.
More interest rates and hidden charges: Instant personal loans can charge higher interest rates than traditional loans. Some lenders can also include hidden fees or processing charge, which can increase the overall cost of the loan to a great extent. So first always review the term and condition.
Debt trap: Due to quick approval and easy disabilities, instant personal loans can implicate you in the cycle of debt. Taking a second loan to repay a loan can increase the debt burden.
Unreperalted lenders: The biggest risk is to deal with such lenders, which regulatory institutions like Reserve Bank of India (RBI) do not regulate. These lenders are not bound by standard practice or guidelines. This means that they can give you a loan on unfair terms, interest rates and fees.
Privacy and Data Security: Instant personal loan apps often demand to share sensitive personal and financial data. If a platform or lender does not have strong safety features, scammers can reach this data and use it wrong.
Repayment Challenge: Instant loans immediately provide funds, but their repair period can be smaller than traditional loans, which leads to the EMI amount later. It can put pressure on your budget.
Misleading offers: Some lenders offer “instant” or “no cost” loans, which may be false. In this case, read the fine print and find out the total cost of the loan, which includes processing fees or prepament charge.
Avoid making these common mistakes
Do not compare: Do not settle on the first offer. Always compare available available offers, interest rates and fees, then choose the best option for yourself.
More borrowed: To avoid more debt, only borrow as much as you can pay comfortably.
Focus on fine print: Read the conditions carefully to avoid hidden charge and fees.
Get into the pretense of excessively good offers: Beware of lenders who promise not to charge high rates or no fees, because they may include hidden costs.
Credit score ignoring: Your credit history affects the terms of your loan. Check your score and if it is low, improve it before applying for personal loan.
Taking a hasty decision: Do not take decisions in a hurry. Always review and compare the loan offer before applying for the loan.
Poor customer support: Ensure that the lenders have a support system to answer any of your questions.
Overall, it is necessary to adopt these precautions to safely apply for online instant loans. To avoid the safety and risk of your data, take a loan only from trusted and regulated platforms and lenders.
Through the Moneycontrol app and website, you can take 100% digital personal loan up to Rs 50 lakh. Whether you need a personal or business loan, completely digital loan offers start from 10.5% annually.
Summary
Instant loan is a better option to meet the sudden expenses, but they also bring some risk. This guide tells you about taking precautions for safe loan experience.
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.