The world of mobile loan apps has grown a lot in the past years giving you a vast number of options for taking a loan online. But with the increasing number of options comes the difficulty of choosing the right option for you. How do you navigate this maze and choose the best option for your specific needs? Keep reading to get the knowledge and tools you need to make an informed decision-
- Firstly, define your needs and goals. Ask yourself these questions before making any decisions about loan apps-
- Why am I taking this loan? Is it to cover an unexpected expense, or make a planned purchase?
- How much do I need? Define the exact loan amount you will need. A few apps like Navi and MoneyView include options for larger amounts and longer terms.
- What is your repayment capacity? While answering this, consider your income, expenses, and existing financial obligations and define your repayment amount.
- How quickly do you need the amount? Defining the urgency of your needs is important as some apps will give you a loan faster than others. For example, Fibe and KreditBee are excellent options if you need a quick credit loan with fast approval.
- Interest Rates and Fees – Interest rates and fees can massively change the overall cost of your mobile loans. Don’t just focus on the advertised rates, dive deeper and always check the details. Few details you should always keep in mind while deciding for your loan app like Fibe–
- Interest Rates- Compare the APR(annual percentage rate) offered by different apps. Lower APRs equals lower overall costs.
- Processing fees – Some apps charge processing fees, which can either be a percentage of the loan amount or a fixed fee.
- Late Payment fees – Most apps have late fee penalties so make sure to know all the terms in case you delay the repayment of your loan. For example, the loan app Kissht charges a daily penalty fee depending on your loan amount.
- Pre-payment charges – Sometimes apps will also charge you extra for repaying a loan early so remember to check if there are any prepayment penalties. For example Bajaj Finance charges a prepayment penalty on personal loans.
- Check out the eligibility criteria – Each loan app has its own set of eligibility criteria that you must meet-
- Age – Most apps will have a minimum age criteria of 21 years
- Income – Minimum income criteria can differ as per your loan amount and the app.
- Credit Score – Some apps require a minimum credit score for approving the loan. For example, to get a personal loan from Navi, you need to have a credit score of 750.
- Employment Status – Some apps require you to be employed or at least have a stable income source.
- Finally, your documents like PAN Card, Aadhar Card and bank statements must be in order.
If you’re a student or young professional, Pocketly and Kissht might be the right fit for you as they offer custom-made mobile loans with flexible terms.
ZestMoney and Slice offer buy now, pay later options letting you split payments for purchases. At the end of the day, its your own personal needs and requirements which will ultimately determine which app is the best fit for you.