In today’s day and age, many people are moving digital with most of their activities. Be it ordering something, paying someone, or even educating yourselves, everything is going digital. One service that went digital and became faster and easier to process than ever is taking out a loan. Yes! With many fast personal loan apps releasing in the market, many people are taking out instant cash loans from such apps for personal as well as business needs. Why wouldn’t they? These apps offer loans at low interest rates compared to the traditional loan options. Apart from that, these apps allow the users to complete the whole process of taking out a loan online making it fast and easy. The approvals for a loan are given fast and the amount is transferred directly to your bank account. To be eligible for the loans you have to be a salaried employee or have a monthly source of income. You also need to be an Indian resident and 21+ years of age. The whole process is simplified and made faster to provide you with an instant money loan. Here are some terms that you must check and keep in mind while applying for a personal or a business loan:
Tenure is the time in which the borrower (i.e. you) returns the principal amount with interest. Mostly, the shorter the tenure, the lower the interest rates. Hence it is important to select a tenure that is not too long nor short. A penalty is issued in case the borrower doesn’t pay back the money owed to the lender by the end of the tenure. Remember to choose a tenure depending on your monthly salary.
APR is the Annual Percentage Rate of a loan. it is interest on the total amount loaned to you in a given year. APR may be different for different individuals depending on their risk profiles. The lower the risk of the customer, the lower the APR. Improving your credit score and paying back on time will help you get a lower APR. it means you have to pay low interest on your finance loan over your tenure compared to someone who doesn’t do the same.
You must have come across this term many times now but what does it mean? EMI is an abbreviation of Equated Monthly Instalment. It is the amount of money that you pay every month to your lender. EMI is based on 3 factors – Loan amount, tenure, and interest rate. When you take out a personal loan it is necessary to know how much you have to pay back each month and that it falls in your monthly budget. If it doesn’t, try to increase the tenure to get affordable payments each month as you will be penalized if you don’t pay on time. Use EMI calculators available online to help you calculate your EMI.
Keep these points in mind when you look for a personal loan.