Ever since instant loan apps shot to prominence in India, the personal loan industry has undergone massive changes. Instant app-based loans offer several significant advantages over conventional loans from brick-and-mortar lenders.
In this article, you will know about the top-7 reasons that prompt informed borrowers to choose an instant loan app in India over traditional lenders.
The Top-7 Reasons That Make App-Based Loans More Cost-Effective Than Conventional Loans
1. Inventory Costs Are Minimal
Personal loan apps follow a branchless model. So, their inventory costs are minimal. They do not spend much on hiring or managing employees. Their business is entirely online, and hence, they do not need to rent multiple properties. Therefore, they pass on the amount thus saved on offering deeper discounts and attractive terms to their borrowers. As a consumer, you may enjoy a higher negotiating power when choosing instant loan apps in India.
2. Interest Rate
Since instant loan apps in India usually target the low and medium-income category, they offer ultra-low interest rates to borrowers. While some lenders calculate the interest monthly, others calculate it annually. As a fact, monthly interest calculation is better than the annual mode since you can modify the repayment term and save more.
3. Value-Added Services
Generally, Neobanks operate personal loan apps. They offer various financial products besides instant loans. The best thing is that you can avail all their services online. You can use an instant loan app in India to open a zero-balance salary account with an interest rate of up to 6.25% p.a. and a free debit card for your family. You may also apply for a pre-loaded credit line and withdraw an advance salary of up to INR 10,000 every month. Moreover, unlike conventional lenders, Neobanks approve quick loans from INR 5,000.
4. Flexible Repayment
Unlike traditional lenders, instant loan apps in India typically provide loans of up to INR 40,000 with a repayment term of up to eight (8) months. You can increase your credit score by repaying the EMIs on or before the due date. A personal loan app contains all details about the upcoming EMI amount, due date, outstanding amount, and loan terms. Usually, the EMI amount is deducted directly from the borrower's bank account. Alternatively, you may pay it using debit cards, UPI, e-wallets, internet banking, or cash via an app.
5. Ease of Application and Approval
A traditional lender may or may not offer you the facility to apply for a loan online. Instant personal apps in India are fully online and convenient. You can download the app from Google PlayStore and create an account. Once the account is ready, it takes only five minutes to apply for the loan. If your documents are in order, you can expect the loan approval on the same day.
6. Minimal Documentation
When you apply for a traditional loan from a brick-and-mortar lender, you have to submit many documents. This is partly because they offer high-ticket loans compared to personal loan apps. Instant loan apps in India require no more than the Aadhar card, PAN Card, bank statement, address proof, and a selfie image. Moreover, you can upload the document images from anywhere, anytime. Hence, an instant loan saves time and eliminates hassles.
Conclusion
An instant loan app in India is all you need to get cash quickly. Straightforward loan terms, simple eligibility criteria, and ultra-low interest rates make these loans a viable alternative to traditional loans.