What to Know Before Using a Personal Loan App?

Many of you have taken out a Personal Loan from a good lender. These days, it has become very easy to apply for a loan using a Personal Loan online app like Hero FinCorp app. Loan apps offer the ease of applying for a loan anytime and anywhere with very few documents and a streamlined online process. It also offers a fast approval time and a convenient loan application process. Read this post to know the essential information you need to know when using an Indian loan app for Personal Loans.

How Personal Loan Apps Work?

Personal Loan apps are digital platforms provided by financial institutions like NBFCs that allow users to apply for Personal Loans online, which require heavy paperwork and a lengthy approval process. Personal Loan online apps are designed to streamline the process. From filling out the application to receiving funds, everything is done through the app, saving time and effort. Once approved, the loan amount is disbursed directly into your bank account within a matter of minutes. Repayments are typically made in monthly instalments, along with the interest accrued.

Eligibility Criteria

The eligibility criteria for Personal Loan apps vary by lender but typically include basic requirements. Generally, you need to:

• Be an Indian resident with valid KYC documents.
• Be at least 21 years of age.
• Have a regular income, whether salaried or self-employed.
• Have a good credit score for better approval chances.

Key Factors That Affect Loan Amount and Interest Rates

Here are the key factors affecting your Personal Loan application:

• Credit score: A higher credit score often leads to larger loan amounts and lower interest rates. Conversely, if your credit score is low, the lender may cap the amount you can borrow and charge a higher interest rate.
• Loan tenure: The tenure (repayment period) you choose also impacts the interest rate. Longer tenures generally have lower monthly payments but higher interest costs over time.
• Type of lender: Different Indian loan apps offer varying interest rates. It’s essential to compare rates across multiple apps to find the best deal. 

Be mindful of interest rates, as they can range from 10% to 30% annually, depending on your profile and the app you choose. Always read the fine print to understand the total cost of borrowing.

Documentation and Application Process

The documentation required to apply for a Personal Loan is minimal. You’ll need your KYC details and proof of income, which may vary for salaried and self-employed individuals. Common documents include the last six months’ bank statement. KYC documents typically include your Aadhaar card and PAN card.

What to Consider Regarding Loan Repayments?

1. EMIs (Equated Monthly Instalments): Most loan apps offer a clear breakdown of your monthly payments, including the principal and interest. You should calculate your EMIs using an online personal loan emi calculator to ensure you can afford the monthly payments.
2. Prepayment options: Some apps allow you to prepay the loan before the tenure ends without any penalties, while others might charge a fee for early repayment. Check the terms before committing.
3. Late payment penalties: Missing an EMI can result in late payment charges and may negatively impact your credit score. Always ensure that you have enough funds in your account before the due date to avoid any penalties.
4. Hidden Fees and Charges: When applying for a loan via a Personal Loan app, it’s essential to read the fine print and be aware of any hidden fees or charges. Always check all types of processing fees, prepayment penalties, or late payment charges that may apply. 

Loan App Security and Data Privacy

When using a Personal Loan app, you are required to share sensitive information, including your financial details, identification and income proofs. Therefore, it’s essential to choose a trusted app that prioritises data security.

Here’s how to ensure your data is safe:

• Use verified apps: Download loan apps from official platforms like the Google Play Store to avoid unreliable apps.
• Check for encryption: Look for apps that use encryption to protect your personal and financial data.
• Read reviews: User reviews can provide valuable insights into the app’s trustworthiness and the lender’s reliability.
• Check data privacy policies: Before submitting any personal information, review the app’s privacy policy to understand how your data will be used and stored.

Conclusion

Using a Personal Loan online app can be a convenient and efficient way to access funds for various needs. Ensure you meet the eligibility criteria, choose a reputable app, understand the repayment terms, and watch out for hidden fees. Additionally, maintaining a good credit score and providing accurate information will significantly improve your chances of approval.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.

Also Read: Fast-track your finances: Online personal loans from private finance