In the past few years, personal loans have emerged as one of the most sought-after loan instruments in the Indian market. Its simpler eligibility criteria and better interest rates are some of the factors that were driving growth in the personal loan market. However, with the advent of quick loan apps, personal loans have witnessed a scaling growth.  Today, you can apply for an online loan with a few clicks on your mobile phone. All you need is to find the best loan app.

Why are online loans taking over the lending business?

You get to choose from a wide variety of lenders

Online loans offered through apps and websites are becoming increasingly popular because borrowers get to choose from a wide variety of lenders. Earlier, a borrower was only limited to the lenders in the conventional financial services market which were active near their location.  With the emergence of app-based lending, anyone can get a loan from any location in India and there is no need for lenders to maintain a physical presence in their location. In fact, many lenders are now built on online and app-based models to support their conventional lending model. 

These loans are faster

There is a reason an app-based personal loan is called a quick loan. Unlike the old school method where everything was done on paper and people had to physically submit the documents and verify the details, the process of online loan is much quicker. All the steps can be done over the internet in a matter of a few minutes. In fact, if you apply for an online loan, the entire process, right from filling up the application form to actually getting the funds in your accounts, happens within a few hours. 

Getting an online loan is simpler

Another factor why the online quick loan concept has gained a lot of acceptance in the last few years is because the overall process is very simple.  You do not need to submit a lot of documents, nor do you need to fill out a lot of forms. All you will need for a loan is your Aadhaar card, your PAN card, and an account statement that shows your income details. With a few taps, you can fill out the forms and submit a digital copy of these documents. Since everything is computerized, the risk of human error is nil, and you can avail of a loan without any hassles.

Online loan interest rate advantages 

Online loans come with a lower interest rate

This is the single most important advantage of an online loan. The interest rate on an online quick loan will always be much more attractive than any conventional personal loan. Interest rates are decided based on a number of factors and a key factor is the cost of doing business for the lender. Unlike the conventional lending model powered by agents that need a lot of paperwork, online loans are much more affordable for lenders because there are no agent commissions involved, nor is there any physical paperwork or verification. As a result, best loan app will give you the best loan interest rates as well.  

You can adjust interest rate by changing the loan amount

Most of the modern lenders work in step based lending model where the amount of loan plays a role in deciding how much interest rate you will be charged. So, people who take bigger loans have to pay a higher rate of interest whereas those people taking loans of lesser amounts are charged lesser interest rates. Now lenders may not tell you the exact interest rate changeover point but you can easily figure this out in online loan by simply changing the loan amount when you apply. If you are near the threshold and can manage with a smaller loan amount, do use this option. 

You can adjust interest rates by changing loan duration: The duration of a loan is also a contributor to how much interest rate the lender will charge for a quick loan. Understandably, a longer duration loan will come with higher interest rate than any loan which is taken for a comparatively shorter duration. Longer duration loans come with much higher risk factor for lenders, and they try to balance this risk factor by increasing interest rates. The best loan app will allow you to change around loan duration so you can easily figure our out if getting a shorter loan can save you money in interest payments. 

How to apply for online loan?

To apply for an online loan, you can download the best loan app on your phone. All you have to do is fill in your information about the loan amount you need and duration for which you want the money, you will be presented with details like EMI, interest rate etc. If the loan offer suits you then you can apply easily by providing your name, address, account details, and upload all the relevant details. Your application will be processed immediately and upon approval, you will get the loan amount in your account directly.