Verify the authenticity of the lender before applying With so many loan apps available, not all of them are RBI-approved or run with a regulated NBFC. Pre-download and apply check needs to be conducted to verify whether the lender is registered on RBI's official portal. Unregulated apps will likely have disguised charges or use harassing recovery tactics. Using RBI-approved apps ensures that you are borrowing from a safe source and can file a legal complaint in the case of a dispute. One must always verify the authenticity before digital lending.
2/5
Understand the true cost of borrowing Loan apps proudly tout fast approval and credit instantly but these apps fail to reveal openly the total cost. Always compare the Annual Percentage Rate (APR) that entails the interest charge and all the fees that are levied. Some apps levy processing fees, convenience fees, or prepayment charges, all of which can substantially escalate your cost of lending. Shop around at a number of apps and choose the cheapest one, not the quickest paying one. It is necessary to be vigilant while using these apps.
3/5
Borrow only what you can repay easily The ease of obtaining instant credit can make you borrow more than you need to. Just remember that missing an EMI can ruin your credit score and fetch hefty penalties. Utilize loan calculators to compare pre-calculated EMI value and check if it is nicely within your monthly limit. Your total EMIs should not exceed 30–40% of your monthly wage, with space for other unavoidable bills and savings.
4/5
Carefully read the terms and conditions The majority of lenders overlook the fine print in their urgency to get money quickly. Carefully read about repayment terms, prepayment policy, late payment charge, and lender's privacy policy. A few of the apps access your contacts, location, and personal info, which can be utilized if you don't repay. Reading them will save you from the shock later and ensure that your data is safe.
Pay on time to keep your credit score healthy Early repayment not only prevents fines but also sets you up on a good credit record, leading to bigger loans at reasonable interest rates in the future. If automatic repayments are part of your application, activate them so you won't miss the deadlines. If there is financial hardship, contact the lender well ahead of time to explore rescheduling or deferment, rather than ignoring reminders and jeopardizing your credit record.
