Outlook Money
Lending apps have transformed borrowing in India by offering quick and convenient loans. However, borrowers must be cautious of the risks involved. While most regulated apps ensure transparency and fairness, some exploit loopholes, leading to unfavorable conditions.
1. App Credibility - Ensure the app is regulated by the RBI or associated with a registered NBFC or bank. Avoid apps that lack regulation, as they might engage in predatory behaviors such as exorbitant interest rates or aggressive recovery tactics.
Compare the advertised interest rates and watch out for additional charges that might be hidden in the fine print, such as processing fees, late payment fees, or convenience fees.
Many apps offer short-term loans ranging from 7 to 90 days. Failure to repay them promptly can strain finances.
Quick loan approvals can tempt borrowers to take loans beyond their repayment capacity.
The application must provide access to support through various channels, such as chat, email, or phone, for any disputes or clarifications. Without adequate support, borrowers may struggle to resolve their issues.