There are many reasons why you might have a sudden need for extra cash. Could be for a medical emergency, or unpaid bills, anything. Before you dip into your precious savings, you could opt for a personal loan, a relatively safe and easy way of getting money when you require it.
Trying to apply for a loan might seem intimidating at first but some planning and research can land you an instant personal loan to take care of your needs. Since fintech is a burgeoning sector in India now, instant personal loan apps have revolutionized the personal loan space by processing loans to eligible customers almost instantly.
Evaluate Your finances
While this is not a requirement for getting a personal loan, it is a major investment in your future. Having a clear idea of your finances will not only let you decide how much credit you need to apply for, it will give you a clear idea of your spending habits and might even save you money in the long run.
Check Your Credit Score
Today’s world is driven by technology and algorithms and your personal loan is not all that different. The amount of interest you pay as well as if you are eligible for a personal loan depends on your credit score, which in turn is dependent on your credit history. Instant personal loan apps also use your credit score among other things to evaluate your risk profile.
Your credit score is easily checked by using any of the credit rating bureaus in India. It is relatively simple and after providing them with your personal information on their website, you can download your credit report which will include their credit score. Depending on your credit score, you can approach lending institutions which might match your profile.
Maintaining A Good Credit History
A good credit score is important for any kind of borrowing activity that you do. Be it applying for a credit card or for applying for a loan of any type. Of course, it is not easy to change your credit score when you are applying for a personal loan.
You can see if there are any small debts that you may be able to pay off before you apply for a personal loan. If you have a small credit card debt outstanding and you are able to pay it off, it is better to pay that off before you apply for the loan. That is if it is feasible for you.
Choosing The Type Of Lender wisely
You should carefully research what sort of institutions including instant personal loan apps to check what sort of criteria each company has. The more streamlined your approach is the better chances of success.
Fintech lenders are slightly more accommodating when it comes to credit history as they are primarily tailored to provide loans to customers who may not be able to get credit from traditional institutions such as banks. Banks also provide personal loans relatively easily. However, documentation requirements might be a bit more complicated at a traditional bank.
Applying At Your Home Bank
Another thing you can do to ensure better chances of success when you apply for a personal loan is to check with your home bank branch. Since you already have a banking relationship with your home bank, it may be easier to get the loan approved.
Checking The Authenticity Of Fintech Instant Loan Apps
If you have decided to go with instant personal loan apps, then the first thing you need to do is to check the authenticity of the app you are using. What is the app like, are there reviews available?
Do they have an address in India as well as registration available on their website? There are many apps nowadays posing as instant loan apps but are just fraudulent organizations hoping to cash in on your personal information or worse, steal money from you.
A lot of fintech loan apps wish to build a credit profile using your personal data as well as phone usage data. Make sure you understand what sort of information the company wants before you give permission to the app.
Also, you should check to see the terms of the loan they are giving, the repayment period as well as the rate of interest. The interest rates of fintech loans can be on the higher side when compared to banks because fintech companies have more lenient lending standards.
While it is good to plan everything in advance, emergencies do happen. If you keep in mind these six tips when you apply for your personal loan, it will make life a lot easier. There are a lot of companies giving out personal loans, so it is essential to do your research properly.