Mumbai: Taking a loan was a headache for all the previous generations, as they had to stand in the queue for longer hours, submit many documents to bank employees and constantly follow up with them for several days, which was a bigger task earlier. getting loans approved by the bank officers.
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Cutting down all these procedures now, many banks, financials institutions have come up with simple and instant online loans. With just a few clicks and uploading basic documents & money will be in your account.
Though it seems easy in processing, there are several risks involved in it. So you need to consider many aspects before applying for instant online loans. Here are 8 things you need to consider before taking an instant loan online.
Rate Of Interest & Processing Fees For Online Loans
People fall under the trap of instant loans and take personal loan, home loan as per their requirements. But important things they don’t check like interest rates, processing fees, and any other charges that may apply. First thing you need to always check before taking any loan is the interest rate and compare it with other financial institutions. As compared to regular banks, the rate of interest rate is higher for online apps.
Terms and Conditions Of Online Loans
Terms and conditions for Online loans can be different from regular banks and financial institutions, as all of these apps do not come under RBI regulations and norms. So if you miss your EMI even by one month, the recovery process of these apps are different from regular banks, which can affect your CIBIL score and credit worthiness in future.
Ease Of Access Of Credit Lending Platform
Mostly people avoid going through the regular process of loans as it’s a lengthy process to opt for such loans. But easy access to a credit platform can cause you big trouble in future. Hence always evaluate the credibility of the platform before taking any loans.
Loan Amount and Repayment Terms
Online platforms may offer you huge amounts of loans. But you need to decide what your actual requirement is.
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Taking a huge amount of loan only because it’s offered by online faults can put you on extra debt burden in future and you will end up paying more rate of interest which you could have utilized for yourself.
Understanding Terms & Conditions
Terms and conditions for all credit lending platforms are different, however people do not go through terms and conditions and blindly just tick on the tick box or sign all the documents as asked by the agent, & these platforms can use the same terms and conditions against when you won’t be able to repay the loan on time.
Documentation and KYC Compliance
Before taking instant loans online, always check whether the platform follows Know Your Customer (KYC) guidelines. Providing accurate and up-to-date information during the application process can reduce delays or complications. Also always confirm confidentiality of your personal documents is maintained by these platforms, so your privacy is not breached.
Repayment Flexibility and Penalties
Before finalizing an instant loan online, always check for the flexibility of the repayment terms. Always check for the penalties for late payments & understand the consequences of delayed repayments as it will impact on your CIBIL score and impact on your future loan applications.
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Customer Support and Accessibility
Online credit lenders offer good customer friendly services before you take any loans, however once loan is credited into your account and if you are facing any challenges or difficulties post loan is processed, you can experience bad credit support. Hence always check ratings by the existing customers of their apps and reviews given by them, to make an informed decision.
