Access to personal credit has become quite widespread with the explosion of online lending apps in India. A simple search for ‘loan apps’ on the Google Play Store returns 250+ loan applications. Though some of these apps are quite genuine, there are also those engaging in malpractices. In light of these, it has become paramount for the common man to be aware of the ways in which they might fall into the debt trap.
Here are some key points to keep in mind while applying for personal loan through online lending apps:
1. Check partnering NBFC & their RBI Registration
Almost all the online lending apps do not issue loans on their own books, but rather do so in partnership with an NBFC (Non Banking Finance Company). It is important to be aware of the authenticity of the partnering NBFC, so do make sure to verify the same on RBI’s website.
2. Read Terms Beforehand
Do give special attention to whether details about the most important terms and conditions are mentioned upfront, viz. interest rates, processing fees, prepayment charges/penalties, tenure, repayment mode etc. The best practice is to have these terms specified even before you provide the KYC documents, while some apps will have these included in the Play Store description itself.
3. Watch Out for Hidden Fees
Make yourself educated about how processing charges, prepayment penalties, foreclosure charges, GST etc. work. It’s not necessary that all these charges are mentioned upfront, so make sure to read the contract carefully.
4. Check before sharing documents
At the time of physical KYC verification, do ensure that the executive is carrying proper identification documents that indicate their authorization by the lending institution. Do not share any important documents unless such a verification is done, in order to avoid identity theft.
Did you know? Walnut is owned by CapFloat Financial Services Private Limited (Capital Float), which is an RBI-regulated NBFC (Non Banking Finance Company). Note: CapFloat is registered as a ‘Non-Deposit taking Systemically Important NBFC (NBFC-ND-SI)’ and the same can be verified on the RBI website here.
As a Walnut user, you may be eligible for availing easy credit using Walnut Prime. You can get credit of up to ₹5,00,000 at fair and friendly terms. All efforts are made to have total transparency as the interest rates, tenure, EMI amounts and all other important terms are mentioned even before you start your application. There are no hidden charges or ‘surprises’ when you trust us with your credit requirements. Learn more about Walnut Prime and check your eligibility today in the Walnut app.