Quick loans have emerged as a convenient financial solution for people dealing with urgent expenses. With merely a few clicks, any quick loan app can process easy approvals and instant cash access, thus proving to be particularly appealing for emergency financial situations. However, the cost of convenience can often be quite hefty.
Hence, if you’re interested in using a quick loan or a salary loan app, being sure to avoid these mistakes could help ensure responsible borrowing.
- Borrowing More Than You Require: Overborrowing is a common trend that we see nowadays. People think it’s always better to borrow an amount that is a little bit higher than what they actually need and put the remaining amount to some other use. Getting a fast loan online using apps offers easy approvals, which makes it all the more tempting for people to overborrow. However, it always proves to be interest-heavy at the time of paying it back.
- Ignoring Interest Rates and Hidden Charges: Whenever you apply for an online loan on a quick loan app, don’t make the mistake of overlooking interest rates and hidden charges. Quick loan apps usually offer higher interest rates, hefty processing charges, and late payment penalties as well.
- Not Reading The Terms And Conditions: The majority of the people who apply for a loan online tend to skip reading the terms and conditions because they are in a hurry to get the funds approved. In cases like these, people usually have blind faith and trust in the app they are borrowing from. But, it should not be a case like this. In such a hurry and blind faith, you might end up overlooking certain important terms like the tenure of the loan, penalty for any missed EMIs or late ones, prepayment rules, etc.
- Using Quick Loans for Luxurious Spends: Another mistake that people often end up committing is using a quick loan app to get their hands on funds that are not needed for emergencies. This can famously include borrowing for shopping or travel instead of a medical emergency or to fund your education. Looking at the high interest rates charged by quick loan apps, it is always advisable not to engage in high-cost borrowing for non-essential needs.
- Applying to Multiple Loan Apps at Once: Many people have the biggest misunderstanding that applying for a loan on multiple apps automatically increases their chances of approval. It actually has the opposite reaction. Applying to multiple apps leads to multiple enquiries on your CIBIL score, which automatically has a negative impact on your credit score. This will only lead to rejections or very slow approvals.
Quick loan apps can be helpful during emergencies if used wisely. Avoid mistakes like over-borrowing, ignoring costs, or applying to multiple apps. Review loan terms, ensure you can repay, and borrow only what you need. Let quick loans relieve, not add to, your financial stress.