A Personal Loan From a Mobile App or To Apply Online? The Better Option
May 27, 2024

ly online to top up their existing Personal Loan or reduce costs by transferring their balance to an alternate lender.

Options are restricted in the case of an App Loan. Axis Finance Ltd, a wholly owned subsidiary of Axis Bank, is the only financer that accepts the Balance Transfer of an App Loan.

In Conclusion

App loans give instant cash and work when small A Personal Loan from a mobile App or to apply online? The better option.

In today’s fast-paced life, individuals prioritise instant gratification for fulfilling their needs. Gone are the days of extensive paperwork banks and NBFCs offer quick credit in the form of personal loans to eligible customers for individual and emergency needs.

What is a Personal Loan Mobile App?

Mobile phones are now our constant companions, with multipurpose reach for various utilities and daily needs. A mobile App can be easily accessed on the go and allows users to receive timely financial assistance through a smartphone or tablet’s mobile browser.

Mobile banking apps offer unsecured loans such as cash, early pay advance salary, and personal loans. The app can be downloaded from the Google Play Store or App Store and must be registered with the RBI (The Reserve Bank of India Ltd).

App loans are short-term credit and are most popular with Salaried persons and offer conservative loan amounts from ₹ 15k to ₹ 5lakhs for emergency costs or shortfalls in personal expenses.

How Does a Personal Loan Through an App Work?

A Personal Loan App interface emphasises the speed and convenience of appending funds. Instant Personal Loan offers are displayed directly on the screen.

The applicant must provide basic information, personal and professional details, and the required loan amount to initiate the process.

The Aadhaar and PAN cards are the primary documents to process the request. The applicant’s mobile number must be linked to the Aadhaar card and bank account: the customer’s details are verified online, and the loan is decided upon.

As the customer permissions have been solicited previously, the amount is transferred to the account directly.

Benefits of a Personal Loan through an App

With an app downloaded on a mobile phone, funds are available with a click when needed most. The USP is the ease and convenience of getting instant funding when required you only need a browser and Wi-fi connectivity.

Applicants no longer need to access a computer facility or make extensive copies of documents minimum documents and details are required to process the loan, which is transferred almost simultaneously after the formalities are completed.

Previous credit history and a CIBIL Score are not mandatory to receive funds from an app loan, though each financer has their policy and can require a credit score to give increased loan amounts.

The Precautions are to be Taken When Applying Through an App

Considering the easy customer reach and promise of ready credit, Personal Loan Apps have quickly gained popularity. As a result, a surfeit of Loan Apps has been created. The RBI has notified over 700 fake apps that have been banned because they are not registered and do not have the requisite permissions for operations.

Before downloading the App, it is vital to check its authenticity, as persistent offers of prompt funding can easily mislead. If the App asks for undue permissions, such as access to your camera or other data, it can put your personal information at risk and should be avoided at all costs.

Be sure to verify the app’s original sponsor. There should be a customer care number that is reachable when required. An alternate financer may fund the personal loan, and the app’s advertiser could be a third party. In such a situation, the advertiser is just the face and may not be responsible for solving any queries or problems that may occur.

Check the terms of the funding beforehand to avoid any surprises or misunderstandings at a later date. The interest rate and EMI payable must be easily affordable to avoid pressures for payment.

What is an Online Personal Loan?

We no longer stand in queues to update our passbooks, check our account balances, or rush to the Bank to withdraw funds all of the above is possible from the comfort of our residence or office. Operating procedures have been transformed to keep up with the digitalisation of the banking industry.

The online platforms are uploaded on leading Banks HDFC Bank, ICICI Bank, and YES Bank websites. Applying for secured and unsecured products is now possible by filling in the required information and uploading the documents.

How Does an Online Personal Loan Work?

On receiving the request for a Personal Loan, a loan account number is created, and the applicant is informed that the request has been registered. If there is a pendency in the documents, the applicant is notified.

If the lender requires a CIBIL, the applicant’s CIBIL score is generated to check whether it is above the necessary benchmark and if there are no aberrations in the CIBIL history.

The lender will then conduct a verification for the KYC and Income documents,

The ICICI Bank provides a link for video KYC, which can be obtained from the applicant’s residence or office to expedite the personal loan process.

The bank’s underwriter will then assimilate the inputs and calculate the customer’s eligibility. A Personal Loan EMI Calculator can confirm the EMI before applying.

The customer signs an agreement acknowledging the loan terms before transferring the loan amount to the Bank account.

Benefits of an Online Personal Loan

Unsecured funds issued once as an Online Personal Loan can be used as the applicant requires. Customers needing excess loan amounts can apply online for loans of ₹ 1 lakh to ₹ 40 lahks.

The interest rate offered for a Personal Loan is 10.75% onwards and is calculated at a reduced balance, giving the applicant funds without any security at the lowest interest rate. The repayment tenure of a Personal Loan can be extended up to 72 months, depending on the EMI the applicant can afford.

The process for an Online Personal Loan is transparent, and the customer is clearly informed of all the terms before disbursing the loan.

With an Instant Online Personal Loan, the processing is expedited so that the customer can receive the loan amount required within 72 hours.

Comparison of a Personal Loan via an App and an Online Personal Loan

Funds received as a Personal Loan from an App or by applying online both serve the purpose of funds for individual or emergency usage. Though an App disburses funds immediately, the sequence moves quickly, and the customer may not understand the implications of the loan.

Transparency of Process and Terms

Financial payment apps advertising pre-approved Personal loans have access to customer KYC information linked to the Bank account and offer loan amounts on behalf of banking transactions. The Loan financer is usually a third party who will ultimately be responsible for any further dealings. Without transparency, reaching out to the financer can be tedious.

On the other hand, Applying For a Personal Loan Online follows a streamlined procedure. The customer is informed of the progress of the request, and finally, the loan amount is disbursed only after the applicant has accepted the terms and conditions.

Costs of the Loan

Having taken a Personal Loan through an App in an emergency, the applicant later realises the high-interest rate when the EMI is deducted from the Bank account. A delay in the payment of the EMI will result in a high penalty and aggressive follow-up from the financer.

Apps provide limited loan amounts with higher costs, whereas an Online Personal Loan has funding available per the customer’s requirements. The interest rate for an Online Personal Loan is among the lowest in the unsecured loan category.

A customer can choose a suitable EMI with a choice of repayment term. In contrast, an App loan EMI is inflated and strains the budget with a restricted repayment tenure and high interest.

Data Privacy

Checking an app’s authenticity may be challenging, as there is a surfeit of offers available on mobile. If you need funds urgently, you can choose the wrong lender involuntarily.

Apps are vulnerable to the leakage of personal information that can be misused if permissions are granted without reading the fine print.

When an applicant applies for a personal loan online, it is in the protected domain of the lender. Information relevant to the process is asked with the borrower’s acknowledgement.

Options for Restructuring

If surplus funds are required, customers can appums are needed that can be repaid quickly within a targeted time frame. Customers already in debt and borrow money from Apps to relieve their current debt are in danger of getting into a debt cycle.

Online Personal Loans are structured loans issued to applicants fulfilling the bank’s eligibility criteria. They have clearly defined terms and reasonable costs.

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