Choosing A Personal Loan Via Instant Loan Apps? Here Is What You Should Know
by Arnab Dey Loans & Credit 28 February 2023
There was a time when consumers were only dependent on traditional banking, be it for saving or taking a personal loan. In the last few years, the growth of fintech has paved the way for digital lending.
In traditional banking, where consumers were required to visit the bank to understand the eligibility process, digital lending has simplified the eligibility criteria and loan application, where borrowers will get to know paytm personal loan interest rates.
For example, they have applied for the Paytm Personal loan, and the loan application status is on the application itself.
Things To Know Before Applying For An Instant Personal Loan
Here are a few things which you must know right before applying for an instant personal loan.
1. Know Your Spending Limit:
When you are considering a paytm personal loan, it is critical to know your spending limit and never exceed it while taking out a loan. Is personal loan interest tax deductible? You can claim it, but spending limits are different from income.
2. Read Through All The Charges:
Furthermore, consumers should consider all charges and not just paytm personal loan interest rates before deciding on the lender. When taking out a loan, you may incur several expenses, such as processing, prepayment, and late payment fees.
A mindful borrower will calculate all the charges to understand their monthly outgo after all loan amount has a significant impact on their EMIs.
Borrowers must ensure that their EMIs should be less than their salary/income so that they can save money for unexpected bills or emergencies.
3. Interest Rates Should Be Compared:
Depending on the type of loan, the capital, and the loan duration, each lending firm gives a different interest rate.
Borrowers must analyze and assess many options before deciding on the best rate. If you are unable to do it on your own, various websites can assist you in locating a loan provider who meets your needs.
4. Verify The Legitimacy:
The hazards of fraudulent activities have increased with the increase in the number of digital lending platforms. Before relying on an online lender, users should investigate the platform’s legitimacy.
One must avoid gimmick offers and false marketing. Lender verification should always be your priority because your paytm personal loan application will give away your personal information that, if it falls into the wrong hands, can have serious effects, including identity theft.
Experts advise keeping an eye out for any significant RBI regulations, particularly those about digital lending. Some lenders, for example, give their borrowers a fluctuating interest rate.
These paytm personal loan interest rates may appear low in comparison to others at first. However, they progressively increase to the point where they drain your financial resources unnecessarily. Some lenders even conceal the fees in the fine print.
As a result, before deciding on a digital lending platform, conduct a thorough investigation. Always choose lenders who are upfront and fully describe their rates, fees, and other procedures.
5. Read All Documents Thoroughly:
Individuals should concentrate on reading the documents provided by lenders. These contracts typically include the individual duration and conditions by comparing the repayment rules, interest rates, additional charges, and fees, among other things.
If you don’t grasp what each of these criteria means, you could end up with a lot of difficulties in the long run. Only those lenders should be trusted that offer their borrowers all the necessary information in-depth and well in advance.
Build your credit score if it’s low: When applying for personal loans, it is vital to have a good credit score or credit history. Your credit score, commonly known as your CIBIL score, reflects your creditworthiness based on your repayment history.
The CIBIL score ranges from 300 to 900, with 750 being considered outstanding. If your CIBIL score is less than 750, work towards increasing it and then apply for a Paytm personal loan.
Don’t send your loan application to many lenders: When a consumer applies for a loan, the lender reviews the borrower’s credit report to determine his or her creditworthiness. Such inquiries are classified as hard inquiries and also recorded by comparing an applicant’s credit report.
These additions can reduce a person’s overall credit score by several points. Multiple such inquiries in a short period of time can have a negative impact on your overall creditworthiness.
How To Select A Personal Loan Online?
Now you already know what the benefit of obtaining a personal loan is. Hence now is the time to learn about the selection process for a personal loan.
Choose the loan that is meant for you: The best one meets your needs. When applying for a personal loan, keep these factors in mind: interest rates, terms of repayment, and additional fees.
The emphasis should not just be on low paytm personal loan interest rates and simple repayment schemes but also on reading the fine print.
Make use of an EMI (Monthly Instalment) calculator to calculate your monthly outgo:
Customers have found the EMI calculator given by online lending firms to be a useful tool. It allows you to understand and estimate the monthly repayment amount, payback tenure, and total amount you can afford to pay. It also shows you the loan amount you are eligible for based on your monthly income and expenses, i.e., the overall cash flow.
Gather all documents and tally them with the lender’s requisite documents:
Aside from the loan application form, you’ll need to gather a few extra documents to fulfil their know-your-customer (KYC) process. The KYC procedure is a personal identification process that is required for credit companies to understand the customer’s details better.
Documents often required for a Paytm personal loan include: Income proof, such as salary slips or tax returns, passport, Aadhaar card, or birth certificate as evidence of age, address proof, such as an electricity bill, phone bill, or ration card PAN card, as well as proof of photo identification.
Complete The Application Form
To fill out the loan request form, simply go to the lender’s website. Choose the loan type and click the ‘apply now’ button at the bottom of the screen.
An application form will appear, requesting information such as your complete name, date of birth, and contact information, among other things. You can submit your application form once you have completed all of the required fields.
In case of emergencies, an instant personal loan is considered the most convenient credit option because of its quick approval facility, quick disbursement of funds, and no need for collateral, provided the borrower fulfills the eligibility criteria.
Technology innovations have significantly fueled the shift from offline to online loan application and approval. Technology has made the lending process more convenient, simple, transparent, and trustworthy, and by keeping the aforementioned points in mind you can further ensure you get the personal loan at a reasonable paytm personal loan interest rate.