As the financial landscape of Nigeria evolves each day, the way people get their loans has changed, too. Mobile loan apps are slowly replacing traditional loan applications. While Traditional bank loan applications require extensive paperwork, multiple visits to the bank, and a lengthy approval process, A loan app in Nigeria is a digital alternative that offers speed and convenience. As more people accept this change, it’s essential to understand the difference between the two loan options. In this article, we will look into the key difference between traditional loan apps and mobile loan apps.
Application Process:
The application process of traditional loan applications vastly varies from the application process of mobile loan apps. The mobile loan app’s application process is faster compared to the traditional process. You can apply for the loan at your home convenience. When it comes to traditional loan applications, you have to pay multiple visits to the bank, provide them with extensive paperwork and documentation, and fill out forms. On the other hand, cash loan apps only require your personal information, such as your name, address, income, and employment details. You also have the option of uploading your documents on the app instead of visiting the bank to submit the documents.
Accessibility
Mobile loan apps are more accessible compared to the traditional loan application process. You can access the mobile loan app 24/7 and apply for a loan at any time. However, when applying for a bank loan, you can only apply for a loan during the bank’s working hours, and once again, you need to visit the bank’s location in order to apply for the loan. If you are looking for an early salary loan, you can depend on a mobile loan app.
Approval Time:
You get a quick loan from mobile loan apps. Loans receive approval faster on mobile loan apps than traditional bank loans. With a mobile loan app, your loan application can get approved within minutes, while it takes several business weeks to get your loan approved via traditional bank loans. This is because mobile loan apps use AI, which processes your application, compared to banks, which employ people to process the application.
Loan amount and term:
Mobile loan apps offer smaller loan amounts compared to banks. This amount usually caps at 80,00,000 Naira. The duration of the loan is also shorter. Banks provide larger loan sums, and their loan repayment duration can last years.
Security:
Fast cash loan apps promise security. Mobile loan apps are equipped with end-to-end encryption, which safeguards your information when it is being transferred. Banks, on the other hand, don’t promise the same safety as mobile loan apps.
Credit Score requirements:
Instant loan apps are more tolerant of credit scores than banks. Many mobile loan apps approve loans for borrowers with low credit scores. To get loan approval from a bank, the borrower must have a high credit score. However, mobile loan apps provide loans with a higher interest rate and fees to risky borrowers.
Repayment process:
With Mobile loan apps, you can pay and repay the amount online. Moreover, you can set your mobile loan app to automatically deduce the loan amount from your bank account every month. Banks require you to visit the location and deposit the money. Moreover, instant loan apps may offer flexibility for repayment, such as early payment without penalties or extending the loan term, while traditional bank loans may not have such options.
Customer interaction:
Banks provide a more personalized loan experience where you can interact with the bank employee who will assist you with the loan application. If you have used a mobile loan app, you know there is minimum interaction with bank employees. A Fast cash loan app are also now introducing a feature where you can interact with employees online via video calls where you can still have a personalized experience at your convenience.
In conclusion, while both traditional bank loans and loans from a mobile app have their merits, the choice between them largely depends on individual needs and circumstances. Mobile loan apps offer unparalleled convenience, speed, and accessibility, making them an excellent choice for those who require smaller loans with faster approval times.
However, they may come with higher interest rates and are generally suited for short-term financial needs. On the other hand, traditional bank loans, although slower and more cumbersome in their application process, offer larger loan amounts, longer repayment periods, and the reassurance of a more personalized service. Ultimately, understanding the differences between these options allows borrowers in Nigeria to make informed decisions, ensuring they select the loan product that best aligns with their financial situation and goals.