Online money-lending apps and services have become extremely popular in the last couple of years. While they were initially simple websites, these platforms have now migrated to the Apple Store and the Google PlayStore and are easier to use than ever. Although the apps were initially considered a novelty, they have amassed enough popularity and users to mark the beginning of a fully-fledged industry.
The main appeal of these apps is the fact that they make it extremely easy to get micro-loans. The loan requests are simple forms that need to be completed with information such as name, address, age, bank account, name of employer, etc. Furthermore, unlike banks that demand a large number of documents as part of a loan application, money-lending apps only ask for proof of identity, proof [of address, and proof of income. These are usually requested as part of the user account creation process.
It is also important to mention that most of the apps do not perform credit score checks or report loans to credit agencies, making it possible for individuals to borrow money without worrying that the debt will affect their credit rating.
Unfortunately, this has led to a large number of individuals getting multiple loans, often from more than one money-lending app, only to discover that this form of debt comes with very high interest rates. As slow as banks may operate and as demanding as they might be in terms of documentation, they are reliable when it comes to debt affordability. This makes turning the app debt into bank debt the best course of action for those who cannot afford to repay their online loans.
Check Your Credit Score
The first thing that you should do is check your credit score. This will give you an idea about how much help you can expect to get from a bank. Keep in mind that most app loans do not affect your credit score.
Decide What Type Of Loan Works Best for You
Next, you will have to decide what type of loan you should get to repay most, if not all of your online debt. You could look at this strategy as a type of debt consolidation loan.
If your online debt is not particularly large but has a high interest rate, an unsecured personal loan should be enough to repay it. However, if you have borrower relatively large amounts of money from multiple online platforms, you may have to get a secured loan.
By no means indicate what you will do with the money. If the bank representative learns that you have a large online debt, he may reject your loan request.
Start Repaying the Most Expensive Forms of Online Debt First
Always start by repaying your most expensive forms of debt. Select the loans that have large overdue payment fees and those with high interest rates and repay them first. Do this even if you will have to pay an early repayment fee. This will save you money in the long run.
Double-check the User Agreement for the Apps That You Are Using
Keep in mind that some money-lending apps may attempt to scam their users by presenting lower fees and interest rates in their promotional content and then attaching higher ones to their loan agreements. Always read the user agreement of a platform to establish what your rights are and to determine if there is a way to make your debt more affordable.
As a side note, if you ever believe that an app has used illegal means to make you pay more money than you should have, do not hesitate to contact its customer support teams, as well as the authorities.