Borrowing Via a Personal Loan App? Here’s Three Things to Watch Out For

When it comes to taking out a personal loan today, all of us know that traditional banks are not the only option available out there for arranging fast, short-term funds. While the popularity of personal loans has increased significantly over the past few years, the number of personal loan providers has also increased a lot. If you were to look for the best loan companies, you’ll see that the number is much higher in 2020 than say, in 2012-13. In addition to banks that offer personal loans, there are also NBFCs and FinTech companies that help you apply for a loan. The thing with FinTech companies is that they use technology to help accord the end-user with financial products, only in a much more seamless manner. These FinTech companies also operate through mobile apps – yes, you can now get a personal loan on your phone!

However, there are a few things that you need to look out for during the loan application process, in case you’re borrowing a personal loan via an app. Here are three of them:

1. References/Contact Details

When we talk about references and contact details in the context of borrowing a personal loan, it just doesn’t end with you submitting your mobile number. Usually, when you’re borrowing a loan from a personal loan app, you’re also supposed to provide references, and by that, we mean the contact details of your family and friends. We’re all used to providing the names of our parents, sure, but some apps also mandatorily ask for the names and contact numbers of one or two of your friends. The reason they mostly do this is so that the loan company can notify these friends of yours in case you default on a payment. So, you might want to think about this one.

2. Addresses

Now, this is where things can get a little confusing. We all know that an Identity Proof and Address Proof document is mandatory to process any personal loan application, no matter the type of lender. But as I said, it can get tricky if you’re trying to borrow via an app. Some apps may require you to upload an Address Proof document of only your current address. This might be tough to do, especially if your documents reflect your permanent address i.e. of your hometown. Either this or you may simply not have the documents they need (rent agreement/electricity bill/gas bill) to show for your current residence. This can put a dent in your loan application.

3. Employer Name

Most apps will require you to provide your loan application from a drop-down menu of employers that they have curated. Most of these will be well-known multinational companies, the employees of whom they are comfortable lending to. If your employer isn’t on the list, then you may have to manually enter their name in the ‘Others’ field (if available). Based on your employer, your rate of interest on your loan stands a chance of getting affected.

In Conclusion

The above points illustrate a few factors you need to be aware of while taking out a loan on a personal loan app. If you are on the lookout for a reliable Personal Loan App, you can give KreditBee a try. KreditBee’s entire loan application process, from profile creation to disbursal does not take more than 15 minutes, and it is completely online on the KreditBee mobile app. You just need to download the app from the Google Play Store, complete your profile, and relax. If you wish to learn more about our personal loan for salaried, please write to us at [email protected] or simply call +080 44 292 200.

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