Many taxpayers need help with cash flows, need cash, and often turn to loans from loan apps. In today’s world, many people want quick solutions to their financial problems. The financial issues have increased the demand for loans from loan apps. Unlike traditional banking, these apps offer a convenient way for taxpayers to access loans.
But why do taxpayers opt for loans from loan apps? What are the benefits, and what are the potential downsides? Let’s dive deeper into these questions.
WHY TAXPAYERS GET LOAN APPS LOANS
Loan Apps started with technology. But getting short-term loans has always been there, mainly from Shylocks. However, with technology, short-term loans from individuals have transitioned to apps. There are many reasons taxpayers get loans from loan Apps. The following are seven reasons:
Emergency Needs: Life is unpredictable, and emergencies can happen anytime. Whether a sudden medical bill or an urgent car repair, loans from loan apps can quickly provide the funds. Many times, taxpayers are in an emergency, and they need money. This immediate access to cash is crucial at such times. The only alternative they have is loans from loan Apps.
Office Repairs: Owning an office comes with its own set of responsibilities, including maintenance and repairs. When unexpected issues like a leaky roof or broken plumbing arise, loans from loan apps can help taxpayers cover those costs without delay.
Buying Equipment: In today’s digital age, having the latest office equipment can be essential for work or personal use. Taxpayers often use loans from loan apps to purchase new phones, laptops, or other electronic devices.
Starting a Business: Entrepreneurs and small business owners frequently need initial capital to start or expand their ventures. Loans from loan apps can provide the funds to purchase inventory, rent space, or invest in marketing.
Paying Off Debts: Managing multiple debts can be challenging. Some taxpayers use loans from loan apps to merge their debts into a single payment, making their finances more straightforward to manage.
Travel: Travel expenses can add up quickly, whether a vacation or a business trip. Loans from loan apps can provide the funds needed by taxpayers for airfare, accommodation, and other travel-related costs.
CBK List of Organisations that Provide Loan Apps Loans in Kenya
BENEFITS OF GETTING LOAN APPS LOANS
Loans from loan apps offer many benefits compared to traditional loans from banks. The following are some of them.
Fast Approval: One significant advantage of loans from loan apps is the speed of approval. Many apps can approve and disburse loans within minutes, providing quick access to funds when needed.
Convenience: Loans from loan apps offer unparalleled convenience. Taxpayers can apply for a loan anytime and anywhere using their smartphones. There is no need to visit any bank or fill out any paperwork.
No Paperwork: Traditional loans often require a lot of documentation, and many taxpayers need help reading or writing. In contrast, loans from loan apps typically have application processes with no paperwork, making applying easier and faster.
Easy to Qualify: Loan apps use alternative data and algorithms to assess borrowers’ creditworthiness, making loans more accessible to a broader audience. Taxpayers with lower credit scores can often qualify for loans from loan apps.
Flexible Amounts: Loans from loan apps allow borrowers to choose the amount they need, whether small or large. This flexibility ensures borrowers can get the right money for their specific needs. But many loan Apps have maximum and minimum amounts that one can borrow.
Transparent Fees: Many loan apps are upfront about their fees and interest rates, providing simple information before the borrower commits to the loan. This transparency helps borrowers make informed decisions.
Automated Payments: Setting up automatic repayments with loans from loan apps is easy. This feature helps borrowers stay on track with their payments and avoid late fees.
No Collateral Needed: Unlike some traditional loans, loans from loan apps rarely require collateral. Taxpayers do not have to risk their assets, like a house or car, to secure the loan.
DISADVANTAGES OF GETTING LOAN APPS LOANS
Every coin has two sides. Though loans from loan Apps have benefits, they also have disadvantages. Every borrower, including taxpayers, must know the disadvantages or drawbacks of loans from loan Apps. Knowing the disadvantages or drawbacks of loans will enable the borrower to make informed decisions. The following are some disadvantages of loans from loan Apps.
High Interest Rates: One downside of loans from loan apps is the high interest rates. The loan interest rates can be more than those of traditional bank loans, making the loans more expensive for taxpayers.
Short Repayment Period: Loans from loan apps often come with short repayment periods, sometimes a few weeks. This can be challenging for taxpayers who need more time to repay the loan.
Hidden Fees: While many loan apps are transparent about fees, some may have hidden costs that are not immediately apparent. Borrowers and taxpayers must read the fine print carefully to avoid unexpected charges.
Impact on Credit Score: Missing a payment on a loan from a loan app can negatively affect the borrower’s credit score. The credit information is reported immediately. With poor credit scores, getting loans in the future will be easier.
Over-Borrowing: The ease of getting loans from loan apps can lead to over-borrowing. This is true, especially for taxpayers who have debt addiction. Some borrowers might take out more money than they can repay, leading to financial difficulties.
Privacy Concerns: Loan apps often require access to personal information, which can raise privacy concerns. Borrowers, including taxpayers, should be cautious about the data they share and ensure the app is reputable.
Constant Notifications: Some loan apps send frequent reminders and notifications, which can be annoying. Borrowers may find these constant alerts intrusive, which can cause mental issues.
Limited Customer Support: There needs to be more contact between the borrower and the loan App business owner. If problems arise, getting help from a loan app can be difficult. Resolving issues quickly can be challenging because of limited customer support from the loan app business owner.
CONCLUSION
Loans from loan apps offer a convenient and fast way to access funds, especially in emergencies. However, it is essential to understand both the benefits and the potential drawbacks before deciding to use these services.
Borrowers can make the best decisions for their financial health by being informed and cautious. Always read the terms and conditions carefully and ensure you repay the loan and any interest on time. This will help you avoid additional charges such as fees and any negative impact on your credit score.
Thank you for reading the article. Let us know your thoughts in the comments.
Dr Wakaguyu
taxkenya@gmail.com
