Instant Loan Money Apps: 5 Myths Busted Instant Loan Money Apps: 5 Myths Busted With fast and hassle-free approvals, no need of any collateral and no restriction on usage of the funds, instant online loans are ideal when you require some short-term liquidity. However, since online loan apps are relatively new in the financial market, there are several misconceptions and myths around them which make people think twice before considering them as a viable option in times of financial crisis. Here are some of the most common myths surrounding instant loan apps, debunked for your convenience. #1 -Loans are only given to people with high credit scores Your credit score is an important factor considered by all lenders while evaluating your loan application. So credit score has a significant impact on whether your loan is approved or not. Instant loan apps, like most other lenders also take your credit score into consideration while deciding whether to approve your loan. However, it is not the only factor considered, and many instant loan apps are likely to approve your loan even if you have a low credit score, as long as you give proof of a stable income to ensure that you can afford to repay the loan. #2-Instant loans come with high interest rates It’s a common belief that since instant loan apps don’t require collateral or a specific reason for borrowing, the ease of borrowing comes with a price – that of high interest rates. While this might be true for some apps, it’s not always the case. Interest rates can be as low as 10% with some apps, especially if you have a high credit score. In fact, the average interest on instant loans is around 12- 14%, which is significantly lower than credit card interest rates, which usually start at 18%. #3-Instant loan apps provide inadequate customer service When a service is given online and not in person, it is difficult to trust the service provider. Instant loans through online apps are no different. It is a misconception that if you have an issue that you need help with and call the customer support, the fact that the lender’s office is probably nowhere near your home affects the customer service somehow. In fact, since the entire procedure is online, many of the instant loan apps have chatbots to help you out, and a lot of lenders focus on providing quality customer service because that is a good way to distinguish themselves from the competition.
#4 - All instant loan apps are the same It is believed that if someone checks a certain app and the interest rates are high, it means that instant loan apps in general charge high interest rates. There are other similar beliefs which just assume that all instant loan apps are the same. On the contrary, instant loan apps differ, especially in terms of interest rates and safety. If you’ve heard of a bad experience with one such app, it doesn’t mean that all such apps will give you the same experience. So you need to be careful while selecting the app to use, because some might be extremely beneficial for you while some might end up taking more money from you than necessary. #5 - Instant loan apps are not safe It’s a common instinct not to trust online applications dealing with money, unless they are very reputed. The safety of instant loan apps is therefore, often in question. While it is true that there are apps that might not be very secure, there are many more instant loan apps that are safe and secure enough to deal with your money. Of course, you need to be careful which app to use, but if you take some time and effort before choosing the app to use, your loan approval process is sure to be just as safe as loans received through a bank. Check out Early Salary to get started!