Apply for an instant loan from Fintechs? Here are the key points to consider

New age fintechs are taking advantage of digital lending and making the process of getting loans faster and more convenient than traditional banks. They offer customized products to meet the requirements of borrowers. Instant Loan is one such product that a customer resorts to in an emergency.

Instant loans can be used as a personal loan from traditional banks or financial technology companies.

Previously, processing a personal loan from a bank was time consuming. However, with the advent of online banking or mobile apps, customers can now avail instant loans at a faster rate.

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

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

“The growing affinity of borrowers towards fintech for personal loans can be attributed to their distinctive characteristics, made possible by technology,” said Madhusudan Ekambaram, co-founder of the Fintech Association for Consumer Empowerment. Express Financial.

Here are some key points to consider when obtaining an instant loan from a fintech.

  • New age loan platforms offer instant loans from Rs 15,000 to Rs 10 lakh.
  • The interest rates for instant loans vary among lenders and depend on the credit rating of the customer. Some fintechs allow customers with an outstanding personal loan to instantly top up the existing amount.
  • While traditional banking setups charge for partial or prepayment, borrowers at fintech companies have the option of choosing no partial fees or prepayment.
  • Before offering a loan, digital lenders assess a borrower’s creditworthiness based on their credit history, employment history, income level, and repayment capacity.
  • Some fintech lenders use efficient underwriting algorithms to assess a borrower’s credit rating and repayment history in order to provide immediate loan approvals.
  • The borrower should provide documents like PAN card, Aadhaar card, pay slips and bank statement for loan processing. With a digital lender, the borrower can upload these documents online through a website or mobile app.
  • Fintech Lenders Leverage e-KYC for Borrowers to Get Digital Signatures on Loan Agreements
  • A borrower should read the terms and conditions and fees before digitally signing an instant loan agreement online.
  • Digital lenders use multiple sources to verify the accuracy of borrower details. It is therefore essential to provide precise information to benefit from the loan.
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