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Do’s and Don’ts While Applying for Instant Cash Loan Online

Do’s and Don’ts While Applying for Instant Cash Loan Online

Financial crises can happen at any time. Sometimes the requirement is immediate, like for a medical emergency and child education, while other times, you may require funds for leisure expenses such as travel, the purchase of new technology, and so on.

The instant cash loan app is a financial tool that can help you meet all of your financial obligations. However, if you fail to follow the do’s and don’ts of an instant cash loan online, you may find that this simple to use tool fails to help you.

Do’s for Instant Cash Loan Online

  • Compare Interest Rates:

It is true that interest rates are determined by a number of factors. However, you can’t ignore the fact that, even when the identical parameters are used to calculate the interest rate, the rates and offers from each digital lender vary.

The rate of interest has a significant impact on your budget. If you take out a higher-interest loan, not only will your EMI be higher, but you will also discover that you have paid a significant sum in interest at the end of your loan period.

Here is a table that will help you better understand this concept.

Parameters 20% Annual Interest Rate 22% Annual Interest Rate 24% Annual Interest Rate 26% Annual Interest Rate
Loan Amount 1.5 Lakhs 1.5 Lakhs 1.5 Lakhs 1.5 Lakhs
EMI Rs. 7,634 Rs. 7,782 Rs. 7,931 Rs. 8,081
Interest Payable Rs. 33,225 Rs. 36,761 Rs. 40,336 Rs. 43,948
Total Payable Rs. 1,83,225 Rs. 1,86,761 Rs. 1,90,336 Rs. 1,93,948

In the table above, it is assumed that the loan was taken out for two years. You can clearly see the difference between the interest payable at 20% and 26%.

  • Prepare your Repayment Plan ;

Personal loans are well-known for supporting in times of need. However, the loan will become a burden for you if you do not have an appropriate repayment plan in place. It will not only damage your credit score, but it will also put you in financial woes.

You can prepare your repayment plan by using a personal loan EMI calculator, which can be found on practically every lender’s website. This calculator will show you the EMIs for various tenures, rates, and amounts. You can use this tool to understand how much amount you can afford to repay without facing any difficulty.

  • Always Check the Loan Eligibility:

Applying for a loan without first evaluating your eligibility raises your chances of being turned down. The requirements for sanctioning the loan vary depending on the lender. Each lender has a different minimum and maximum age, minimum income, employment type, and credit score. Some lenders may lend to people earning as little as Rs 15,000 per month, while others will require a minimum salary of Rs 25,000. A similar concept applies to other influencing factors.

As such, it is strongly recommended that you use a loan eligibility calculator for this. The calculator will help you in comparing the eligibility requirements with various lenders. Since you get to know about your qualifications within seconds, it also saves your time and effort.

Don’ts for Instant Cash Loan Online

  • Never Apply with Lender

It is common to experience panic in an emergency. However, if you apply with many lenders during an emergency, it will simply exacerbate your troubles. Your credit score will suffer if you apply to more than two or three lenders. As a result, it is a strict no and the first of the don’ts of an instant cash loan online. Multiple applications indicate to the lender that you are a desperate borrower.

In this instance, the best thing you can do is thoroughly analyze the various lenders’ qualifying conditions and make an informed decision.

  • Never Miss your EMI:

It takes time to establish a credit history. As soon as you have your first credit line, you’ll have to work on a few things. And the first order of business is to make sure you’re paying your bills on time. Skipping EMIs lowers your credit score, which has an influence on your borrowing capacity.

Furthermore, the relevance of the debt-to-income ratio should never be overlooked. Before you apply for a personal loan, check the amount you are left with after paying all your existing dues. You must also include your necessary expenses to determine the leftover income.

  • Not Checking the Lender’s Authenticity

There are several fake instant cash loan apps on the Play Store. The Reserve Bank of India has also warned lenders of this numerous times. As a result, applying for a loan without first verifying the lender’s legitimacy is a mistake.

Check to see if the lender has a physical address rather than just a virtual one, see if the lender is registered with a regulatory authority, and, most importantly, compare the rates. If the rates are much cheaper than those offered by competitors, this is a major red flag.

To sum it up:

Instant cash loan apps are the real saviour in your tough times. It can offer you funds right away with just a few clicks. As a result, double-check that you are following the above guidelines when filing your loan application.

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