Until recently, getting a loan used to be a daunting and time-consuming process in India. Applying for loans involved a long and complicated process, requiring numerous visits to the lender, endless paperwork, and a considerable amount of waiting time. 

Due to various digital initiatives of the government and the Fintech revolution, we can now get a personal loan online within few minutes over a mobile app without requiring any physical paperwork. 

Below are 3 ways by which these instant digital loans are changing the financial habits of Indians: 

1. Digital Loans Help You Budget Better

One of the most valuable features of instant online loans is that borrowers get multiple repayment options to repay the loan. Based on liquidity, you can choose the repayment period of your choice. This minimizes the pressure on their monthly budget and the loan can be repaid without compromising on your lifestyle.

2. Credit is Available When You Need It

Without having to go through the long and tiresome loan application process of traditional providers, you can now comfortably avail loans whenever there is a need for money.

3. Smaller Instant Digital Loans Help Build a Better Credit Score

Even people who are relatively new to credit can now build their credit score quickly, with small- loans online. The credit score improves whenever loans are repaid on time. In turn, a high credit score helps to get high-value loans like home loans at low-interest rates.

Two Factors to Consider When Taking Online Personal Loan 

1. Check for the Interest Rates of Different Loan Companies

It is highly recommended that you compare the interest rates of different lenders, so that the loan can be availed from the one offering the best terms.

Also Read: Personal Loan Interest Rates & Charges

2. Check for Hidden Charges

There are multiple charges apart from the interest amount that are associated with a loan. It is important to ensure that the lender does not charge any hidden fees. 

Always double check for charges and fees like: 

Processing Charges:

In order to process your application and give you a personal loan, Banks and NBFCs have to incur many costs like administrative work, verification processes, credit assessment, etc. To cover these expenses, a nominal processing fee is levied on the loan.

Verification Charges:

This is charged to cover the cost of verifying details given by loan applicants. This includes money spent on validating the authenticity of the documents, verifying the borrower’s credit history and creditworthiness, performing background checks, etc.

Late Payment Penalty:

You would need to pay penal interest or late payment penalty if you don’t pay your EMI on the due date. You can check these penalties in the loan agreement or terms and conditions.

Prepayment Charges:

These are also known as prepayment penalties or fees. This is charged by a loan company if borrowers repay their loan amount before the due date. Prepaying loans could save you money on interest payments.

Administration Fees:

This fee could be charged by a lender to cover the cost incurred during the loan’s lifecycle, like customer support, servicing the loan, maintaining digital infrastructure, etc.

Conclusion:

Looking for a smooth and fast loan experience? Try out the Zype app. With just three easy steps, you can quickly apply and receive loan approval up to ₹5,00,000. From Zype, you can select a desired amount, a convenient EMI option and get the money directly into your registered bank account. There are no hidden charges. Download the Zype app now!