Apply for Instant Fintech Loans? Here are the key points to consider

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New age fintechs are leveraging 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 fintech companies.

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

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, the loans require regular KYC documents and the money is credited the same day.

Unlike risk-averse banks and NBFCs, digital lenders offer funding to Newbie Credit Borrowers (NTCs). As the process is digitized, it requires less or little physical paperwork.

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

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

  • New Age lending platforms offer instant loans from Rs 15,000 to Rs 10 lakh.
  • Interest rates for instant loans vary between 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 institutions charge partial or prepayment, fintech borrowers have the option of choosing zero fees on partial or prepayment.
  • Before offering a loan, digital lenders assess the borrower’s creditworthiness based on their credit history, work history, income level, and repayment capacity.
  • Some fintech lenders use efficient underwriting algorithms to assess the borrower’s credit score and repayment history to provide loan approvals immediately.
  • Borrower needs to provide documents like PAN card, Aadhaar card, payslips 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 obtain 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. Therefore, providing accurate information is essential to qualify for the loan.
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