An online loan app has brought different types of loans to our fingertips. Whether you need urgent cash to pay hospital bills, sponsor a wedding, go on a foreign tour, buy a house, carry out urgent house repairs, or purchase a motor vehicle, a loan app makes funds accessible. Moreover, paying EMIs is also simple, as you can track your loan status on the app.
But, before applying for a loan through an instant loan app, you should have already made answers to a few questions. Before using a loan app, try to spend some time gathering information about the loan and the app. Unlike a novice borrower, an informed borrower can often get more value-added services and better interest rates.
The Top-4 Questions You Should Ask Before Applying For a Loan With an Online Loan App
Question 1 – Which Loan Shall I Choose?
Indian lenders offer various types of loans, like personal loans, property loans, auto loans, etc., online. Before choosing the lender or their app, you should determine the type of loan you need. Usually, borrowers download instant loan apps to apply for personal loans, as a personal loan is the most accessible loan for all purposes.
Question 2 – Why Do I Need the Loan?
Determining your purpose is as crucial as choosing the best online loan app. Analyse the amount you will require to fulfil your personal needs. Ensure that you factor in all aspects before finalising the loan amount. Sometimes, a borrower would apply for a loan, only to realise that they need another loan to fulfil some other purpose. Hence, it’s always prudent to calculate the total funds you need and figure out the amount.
Question 3 – Will the EMIs Be a Burden For Me?
While an online loan app makes applying for a loan and repayment an easy affair, repaying EMIs can put a strain on your financial health. Generally, personal loan interest rates start from 11.99% and may go up to 30%. It is wise to use the loan EMI calculator to get an idea about the amount you need to pay every month. A prudent borrower would never allow their debt level to rise beyond 40% of their gross monthly income. Hence, before applying for the loan, try to analyse your spending habits, fixed monthly expenses, and other liabilities, and choose an amount which does not impact your life much.
Question 4 – How Much Time Will I Get to Repay the Loan?
The loan term has a direct impact on the EMI you need to pay. For example, if you apply for a loan amount of INR 5 lakh at an interest rate of 13% and a loan term of 2 years, your monthly installment amount will be around INR 23,000. In contrast, if you choose a long term of 5 years, the EMI will reduce to INR 11,377. However, lenders often offer lower interest rates on short-term loans.
Applying for a loan can be a blissful experience when you know which lender offers you the best online loan app. The best loan app is the one that lets you inquire about the loan, see the loan status, and repay EMIs, all from within the app. Hence, you do not need to run from pillar to post to apply for a loan anymore, as an instant loan app can take care of the process while you relax at the place you are in.