Introduction
You apply for a ₹10,000 loan and receive only ₹8,500.
This is one of the most common complaints from loan app users in India.
The reason? Hidden charges.
Let’s break down what most borrowers miss.
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1. Processing Fees Deducted Upfront
Many loan apps deduct:
- Processing fee
- GST on processing fee
This means:
- You receive less money
- You still repay the full loan amount
Always check the net disbursal amount.
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2. Short Tenure = Higher Effective Interest
Some apps offer loans for:
- 7 days
- 14 days
- 30 days
Even if interest looks small, the annualized cost becomes extremely high.
Example:
- ₹1,000 interest for 15 days
- Looks small, but equals a very high yearly rate
Short tenures are a silent cost trap.
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3. Late Payment Penalties Add Up Fast
Hidden penalties include:
- Daily late fees
- Compounded penalties
- Extra GST on penalties
Missing one due date can double your repayment.
Always read the penalty section carefully.
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4. Auto-Debit Without Clear Consent
Some apps:
- Enable auto-debit by default
- Attempt multiple debits
- Charge bounce fees each time
Safe apps explain auto-debit clearly and allow control.
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5. Loan Renewal Traps
Instead of closing your loan, some apps:
- Offer renewal
- Add new fees
- Extend debt cycle
This keeps users stuck in continuous borrowing.
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How to Protect Yourself
Before applying:
- Read full loan breakdown
- Check repayment schedule
- Avoid urgency-based decisions
If details are unclear, do not proceed.
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Final Thoughts
Loan apps can be helpful — but only when you understand the real cost.
Mudriva exists to help borrowers see beyond marketing claims and choose options that are transparent and fair.
Borrow smart. Stay informed.