0

0

0

0

0

0

0

0

0

This article is more than 1 month old.

Applying for instant loans from fintechs? Here are key points to consider

Mini

Unlike risk-averse banks and NBFCs, digital lenders offer financing to the New-to-Credit borrowers. As the process is digitised, it requires less or limited physical paperwork.

Applying for instant loans from fintechs? Here are key points to consider

New age fintechs are leveraging digital lending and making the process of availing loans quicker and more convenient than traditional banks. They are offering customised products to meet the requirements of the borrowers. Instant loan is one such product which a customer resorts to in times of an emergency.

Instant loans can be availed as a personal loan from traditional banks or fintech firms.

Earlier, processing a personal loan from a bank was time consuming. However, with the advent of net banking or mobile app facility, customers can now avail instant loans at a faster pace.

On the other hand, private banks offer pre-approved loans to some of its existing customer with good credit history. Any customer with an operational bank account and fixed income can apply for an instant loan. At most times, loans require regular KYC documents and the money is credited the same day.

Unlike risk-averse banks and NBFCs, digital lenders offer financing to the New-to-Credit (NTC) borrowers. As the process is digitised, it requires less or limited physical paperwork.

“The increasing affinity of borrowers towards fintech for personal loans can be attributed to their distinctive features, enabled by technology,” Madhusudan Ekambaram, co-founder of Fintech Association for Consumer Empowerment, told Financial Express.

Here are some key points to consider while taking an instant loan from a fintech

  • New age lending platforms offer instant loans from Rs 15,000 to Rs 10 lakh.
  • Instant loan interest rates vary across lenders and depend on the customer’s credit score. Some fintechs allow customers with an ongoing personal loan to take an instant top-up on the existing amount.
  • While traditional banking set ups charge for part or prepayment, borrowers from fintech firms have the option to choose zero charges on part or prepayment.
  • Before offering a loan, digital lenders evaluate the borrower’s creditworthiness based on their credit history, employment history, income level and repayment capacity.
  • Some fintech lenders use efficient underwriting algorithms to assess the credit score of the borrower and his repayment history to provide loan approvals immediately.
  • Borrower needs to furnish documents like PAN card, Aadhaar card, salary slips and bank statement for processing the loan. With a digital lender, the borrower can upload these documents online through a website or a mobile app.
  • Fintech lenders leverage e-KYC for the borrowers to get digital signatures on loan agreements
  • A borrower should read the terms and conditions and the charges before digitally signing an instant loan agreement online.
  • Digital lenders use multiple sources to verify the accuracy of details of the borrower. Hence providing accurate information is key to availing the loan.
  • next story