Apply for an instant loan? You should know that

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The use of a loan has evolved a lot over the years, especially with the advent of technology. Customers no longer have to wait in long queues or go through unimaginable amounts of paperwork to take out a loan. Technology and the rise of fintech brands have paved the way for loans to be sanctioned almost instantly. However, it is still an aspect that cannot be taken lightly. Negligence in taking out a loan can leave us in a corner. For example, it is extremely important to know the total cost of the loan and understand the terms and conditions involved.



The list of things to review includes ROI, processing fee, and other miscellaneous fees such as legal and documentation costs. To this end, you should know that the Reserve Bank of India (RBI) requires all lenders to explicitly disclose their borrowing costs, also known as the Annual Percentage Rate (APR). If a lender does not provide these standard disclosures, this is your keyword not to take credit from them. However, let’s take a look at some key points to keep in mind when applying for an instant loan.

Watch out for compliance alerts

This is where the question of registration becomes quite relevant. As mentioned earlier, with the advent of the internet and the digital age, things are no longer what they used to be. You can take out loans for smartphone interface services that you would traditionally turn to a stationary service point for. Today we have app-based online lending and while this is a remarkable advance, it also requires your full caution.

Now it is important to check that the company you are borrowing from is an RBI registered lender, be it a bank or NBFC. Without this precautionary procedure there is no safeguarding of your rights as a borrower vis-à-vis the lender who may resort to shady and unscrupulous moneylending practices.

Also, be a savvy consumer if the lender asks for sensitive PII without clear disclosure. Many online lenders request sensitive PII such as SMS, contact and call logs via Android apps, among other things. In such a case, ask the lender to clarify the use of this customer information and make sure that no misuse is possible. On the other hand, this is no reason for you to be careful about the process, as the PII obtained in this way are the benchmarks for your loan approval rating.

Price check

Another safety measure on your part as a responsible customer is to take a critical look at loan prices and avoid inappropriate loans. It is safest to turn away from any lender who has a maximum APR of more than 40 percent. It is common for a registered lender to charge fees regardless of the loan they are selling. It is also advisable to avoid microloans with a short term term of 90 days and a ticket size of no more than INR 20,000. The main disadvantage of these microloans is that they come at a very high price point and their size and duration can make them extremely difficult to repay. Even more problematic, these microloans can happily drive the borrower into a debt trap as they often turn into an endless credit cycle.

Credit product analysis

A product analysis is always a recommended and safe way to measure the requirements for the lender’s offers. It is a standard procedure for lenders to disclose their minimum to maximum loan amounts and terms before submitting your loan application. Hence, you need to assess your borrowing ability and funding needs to ensure that the loan amount is within your comfort zone for repayment and meeting your needs.

Opt for seamless and convenient processes

In the meantime, it would also be wise to prefer lenders with minimal documentation requirements. As a rule, in addition to meeting the eligibility criteria, only KYC verification is required. With regard to the processing time for loan processing, the time from loan application to disbursement for instant loans should not exceed 48 hours.

Last word

It is essential to avoid applying for loans from several lenders at the same time. All lenders take stock of your recent inquiries as part of their eligibility check and a high number of inquiries tend to affect your eligibility. This will also have a negative impact on your eligibility rating and undermine your chances of getting a loan approval.

In addition, it is crucial that you examine the loan agreement with the utmost care. Getting the maximum information about a lender and their standard requirements will help you determine which lender best suits your needs. All compliant and registered lenders will pay off the loan against a specific loan agreement that sets out all the details and conditions.

In addition, they also need to add a section of MITC or the main terms and conditions. These general terms and conditions contain the most important information relating to the loan and are available to customers at all times. Pay attention to every detail. If you make sure you follow these simple but effective steps, you can get instant loans seamlessly and avoid unnecessary problems

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