Are you looking to give your home decor an upgrade or planning to go on a vacation? Or do you require instant money for unforeseen medical expenses or making a purchase? A small loan can be the exact solution you need to meet your financial requirements.
Taking on a big loan can be a big decision, which is why you would want to make sure that it is not only safe, but also aligns with your earnings and does not add to your financial burden. However, small loans as the name suggest provide a small amount of loan money and do not require too much evaluation. Small loans can be applied online and are approved instantaneously. Just be a bit cautious and read all the terms and conditions carefully before applying for a small loan online.
Since small loans are applied online so you do not have to worry about the safety of your documents and your bank details, still there are a few things which need to be considered before applying for a small loan online. Taking care of these small things before applying for a loan can help you levy off the worries which might arise after applying for the loan. It is always recommended to be vigilant and be ready with additional information and documents in case you’re asked to submit additional details.
1. Interest Rates
Before you sign up for a small loan it is important to check the interest rate at which you are getting the loan. Ideally, you should choose the loan which offers you the lowest possible interest rate and favorable repayment period so that you can focus on paying off the money which you have borrowed rather than worrying about managing the extra interest.
2. Fees and Hidden Charges
Carefully check the terms and conditions, the interest rates, associated fees, and other charges before applying for a small loan online. There might be a small amount of processing fee charged from the applicant which you should check before applying. In case of a delay in the repayment of the loan, you might also be charged with a late fee or penalty.
3. Repayment Options
Small loans offer individuals the facility to repay the loan in easy installments over time. The tenure can be selected according to your preference. But once fixed, you won’t be able to change your EMI date or amount. So, think carefully before choosing your repayment plan.
4. Safety & Privacy
Applying for a small loan requires you to submit and upload confidential information like your bank account details, your salary slips, identification documents, as well as your bank statement. So before applying for a small loan online, check the security and privacy policy of the lender’s website or mobile application before you apply for a small loan online.
The data shared by you should be protected with industry standard encryption and should be only accessed by you or by the authorized personnel involved in the application approval process.
5. Credit Score
It’s difficult to avail loans if you have a low credit score. But with small loans, you do not have to worry much about your credit score. You can avail these loans despite having a low credit score or no credit score. In the absence of a credit score, the lender will evaluate your income and repayment ability to sanction the loan. If you have a credit history, then after you have uploaded all the required employment details, the lender will access your credit score, on the basis of which you receive your loan approval.
Apply for Small Loans Online
These days you can apply for small loans easily online or on the mobile app of the lender. The application is usually simple and asks for a few basic details regarding your employment, income, identity, loan amount required, preferred loan tenure etc. You can then upload the supporting documents online. With basic KYC documentation and eligibility established, the lender can now process the loan application and let you know the outcome.
You will also need to choose the loan repayment method which in most probability will be through an auto-debit mandate on your bank account or via post-dated EMI cheques. On the selected EMI date, your EMI for the month will be deducted from your bank account. In most cases, the EMI date will be in the first week of the month, to ensure your bank account is sufficiently credited with money to pay the EMI.
The whole application process takes just a few minutes and the approval is instantaneous. What’s best? If your loan application is approved, then the money is transferred to your bank account within a day or two. These days it’s really simple to avail small loans online from fintech enabled financial services companies.
