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Even though taking instant online loans has lots of advantages it also has some disadvantages which you should consider and understand.
Here are some of the main disadvantages you can face when availing online loans. Whatever reason or reasons you might be having for taking these types of loans, the key here is to repay back the loan you have taken on time and regularly.
Let us see some of the main disadvantages you might face when availing instant online loans.
1. High Interest Rates And Fees
Not only do these online instant loans have high-interest rates, but the processing fees are also quite high in comparison to normal loans. You should opt for it if you are in a very urgent need.
Online loans have higher interest rates and fees, compared to normal loans.
On top of that, you will also have to pay a fee if you are late in your payment. Most late repayment fees that are charged quite high that they can reach up to double or triple the amount that you have borrowed.
2. Short Repayment Period
The maximum repayment period can be 30 days while on average these online loan providers give you a week or two weeks to repay your borrowed money.
While normal banks give you an ample time repayment period in which you can repay within a span of some months to few years which makes it easier to clear your dues.
3. Your Privacy Is Not Their Concern If You Missed The Payment
These online loan lenders hired such kind of people who don’t give a damn about your privacy or reputation.
You will start receiving a number of calls to repay your loan on the last day. The harassment will increase until you repay the money.
If for a certain reason, you fail to repay within the grace period of 3-7 days, you have to convince that you will definitely pay on your promised date.
If you are not able to pay, they will keep on calling and harass you many times in a day. If you fail to receive their calls or are not paying, they will start calling your contacts.
To avoid that, try to repay on your promised date. They are much harsher than the bank people to the obvious reason that you are lending from private lenders!
4. Easy To Be Listed As CIBIL Defaulter
All the online loan providers do not report your repayment schedule, however, some loan providers who are registered under the RBI do give a report of your repayment history which can have an impact on your CIBIL score.
To Sum Up
Availing Online Loans can lead you into more debt-trap if you don’t know how to manage it properly. On the contrary, having a defined goal to achieve your financial needs with the help of instant loans can be a great advantage rather than a disadvantage.
However, you should be cautious whenever you take any loan. Try to repay the highest interest loan first so that you can add up to a little saving.
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MLian’s passion for writing is to help you understand that ‘All That Glitters Is Not Gold’. Her mission is to show you Practical and Actionable Ways To Earn Money online and offline to save your time and money – that you won’t get “SCAMMED” into buying something that promises Big but really doesn’t profit anyone except the owners.