LoanTap Review - EMI Less Loans in India

In India, loans are something people look down up on. Because their experience applying for one is almost always negative. Almost everyone I know of tell me stories of how they applied for a personal loan or an education loan in India and got turned down by the bank. It's not a pleasant experience even if you managed to get the loan.  All those documentation, questions etc! Hah! Well, startups like LoanTap are trying to fix this. They are a new breed of lenders that are hoping to offer loans (personal, education or others) to salaried individuals online and make the whole experience of loan application easy.

What is LoanTap and what are EMI Less Loans?

LoanTap calls their products "EMI less" But what does that really mean? Let's say you are a salaried person with monthly salary of Rs.50,000. Once you submit your loan application to LoanTap, your application is made completely online (including submission of docs etc) and once the amount disbursed to your bank account (which happens in 24 hours), you pay the interests monthly directly from your account. For a loan of up to 4 Lakhs, here is the split that I'd have to pay. Max repayment months - 60 months Interest rate per month - 1.5% Interest payable monthly - Rs.6000 Processing charges - Rs.9,200 So, for taking a 4 Lakhs loan, I'd have to pay a monthly interest of Rs.6000. Keep in mind that it doesn't add up to the principal amount. Your principal amount stays the same as long as you are paying a "bullet amount". LoanTap's website doesn't clearly tell you what happens when you pay off your principal amount, except that it reduces. Reduces by how much, what happens to my monthly interest rates etc. So, on the outside, this sounds like a Payday loan company. It's great if you have some immediate cash emergency and have no funds lying around to make use of. Instead of going to predatory private loan lenders, get an online EMI loan from LoanTap and when you get the money back or are in a good position to pay it back, pay the whole amount off. The faster you pay off the loan, the better it is, as you will be keeping on paying the interest without reducing the principal amount. It is similar to cash advances from credit cards but the interest rates competitive and might appeal to those who wants cash for immediate emergencies.