Instant personal loan apps on the rise: What every borrower should know

Traditionally, to get a personal loan, a borrower was required to visit the bank branch to enquire about the loan and make several visits to the branch to apply for a loan. With the evolution of the financial landscape and digitisation, applying for a loan has become quicker and more convenient.

On such a platform is an instant personal loan app that provides instant loans offered by institutions such as banks, NBFCs and third-party apps.

Features of instant loan app

1. Many options: Instant loan apps are a one-stop destination for learning about several options your lender provides. It gives you access to a loan that matches your needs and financial conditions with just a few taps on your phone.

2. Instant approval: Compared to traditional ways of seeking a personal loan, an instant loan allows you to get the loan approved quickly. Therefore, it is suitable to meet emergency financial requirements as the loans are typically approved within minutes.

3. Less documentation: There is no paperwork involved when you apply for a loan through an instant personal loan app. These apps require relatively fewer documents to apply for a loan. You will have to upload the necessary documents on the app to complete the application process.

4. Easy to apply: It is fairly easy to apply for a loan in an instant loan. The process is relatively shorter and hassle-free, making it convenient for beginners to get a loan.

5. Quick loan: With instant approval comes quick loan disbursement as well. It takes less time to disburse the loan amount through an instant loan app when compared to the traditional method of getting a loan.

How to use an instant loan app?

Step 1: Download the instant loan app from a registered app store.

Step 2: Install the app and sign up by entering your details, such as name, contact number, email ID, age, etc. The app will verify your details by sending a one-time password (OTP) to your registered email or phone number.

Step 3: Fill in the loan application form by providing your personal and financial details such as income proof, address proof, bank details, etc.

Step 4: Upload the necessary documents on the app and review your application.

Step 5: After thoroughly reviewing your application form again, submit it.

Few tips to keep in mind

1. Loan amount: Before applying for a loan through an instant loan app, always plan to borrow the amount you require rather than overborrowing. Every loan has to be repaid in the future, so if you borrow an unrealistic amount, it will become difficult to repay in the future, straining your finances.
2. Interest rate: Always check the interest rate charged. A high interest rate on your loan will make it expensive. Try to compare interest rates in various loan apps and choose the most feasible option.
3. Check repayment terms: Make sure to check the repayment terms in the loan you plan to opt for. Do not opt for loans that provide difficult repayment
4. Regulated apps: Stay away from unlicensed or unregulated apps, as these might be a potential scam. Always opt for regulated and trusted instant personal loan apps.

Disadvantages of instant loan apps

1. High interest rates: Some apps may charge high interest or levy hidden charges, taking advantage of people who are in need of emergency funds. Hence, borrowers end up paying high costs to get urgent funds.
2. Potential scam: Instant loan apps are relatively new to the financial landscape. Some borrowers may fail to distinguish between a genuine app and a fraud.

3. Data privacy concerns: Instant loan apps request your personal information to verify your identity and apply for a loan. Providing your necessary details online may cause data privacy concerns if the instant loan app does not adopt measures to protect your data.

In conclusion, instant loan apps have made it easier for borrowers to fund their needs. However, with this convenience, do not overborrow or get a loan with unrealistic repayment terms. This would hurt your finances in future. Additionally, before getting a loan from any digital platform, always check the reliability of the lender to avoid scams.

(Note: Raising a personal loan has its own risks)