Personal loans are a new genie in disguise for many who have financial requirements and limited resources. In today’s digital age, several technology-driven fintech institutions operate on the premise of analytics, data, emotional intelligence, and robust technology.
Though personal loans have always been an excellent way to borrow funds, earlier it was a time taking and a long process of visiting the institution several times, filling in the formality forms, and finding a guaranteer for loan sanction.
However, today, in the era of the world wide web, individuals can avail instant loans from their couch. Instant loans mean that the amount gets credited to the borrower’s account immediately once the loan gets sanctioned.
This requires minimal paperwork and no havoc of frequent visits to the financial institution. Such conveniences make the process of availing loans seamless and less time-consuming. With the use of emerging advanced technology, the financial institutions have used data analytics and other technological tools to lower the obstacles and make loan availing a cakewalk for the customers.
These institutions are using data to attract customers, underwrite, and provide invaluable service to them. These new-age financial institutions which use technology to build their process are called fintech companies.
There is an example of a person from Mumbai who applied for a loan of INR 5 lakh in a private bank. It took him 10 days to avail the loan, together with multiple to fros to the bank. While he was paying the EMIs for this loan, 3 years later, he again applied for a loan for a vacation. This time he applied for the loan from a fintech platform.
Much to his surprise, he could avail of this loan immediately, that too with no visits to the bank. This is not the only case when applying for loans has online helped individuals save their time and efforts.
Today the majority of the millennials access instant personal loans to meet their financial requirements. This facility of instant loans has also changed the lending pattern. Now people often apply for short term loans to finance their vacations, weddings, and other such requirements. Click here to know more about the best personal loans available.
Though the process of availing a loan has become easier and faster than before, this development has also lead to an increase in the number of loans people take. This often puts the customers in a debt trap. Customers should ensure proper management of their finances and timely repayment of the loan.
This serves two purposes, one is that it keeps them safe from the shackles of a debt trap which might lead to financial and emotional crises. Second is that timely repayment helps customers build a good credit score. This credit score, in turn, helps them to avail loans faster and at better rates in the future.
The fintech companies with their robust technologies, data, and analytics, provide various advantages to the borrowers. Here is why these fintech companies are the preferred lenders:
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Availing instant loans is rather quick and convenient. The application for the loan is fone digitally and instant communication is held with the customers. The emergence of an easy and efficient interface helps in proper customer service. This saves the time and effort of both, the client as well as the financial institutions
Traditional banks and financial institutions follow the conventional tradition of underwriting loans. However, these new-age fintech institutions provide personalized offers to their customers. Their offers range from INR 500 to INR 25 lakh. The process is flexible as even the loan tenures and ROI can be customized
Several individuals are new to the credit segment. They do not have any prior history of loans or credit score. This group of customers is generally new professionals and millennials. Technology played a very crucial role in the credit journey for such clients. The use of demographic data, analytics tools, and the application of artificial intelligence help the emerging fintech companies to analyze this customer group and provide them with loans. Once they are sanctioned the loan amount, they can build a credit score on the credit bureaus
This facility of instant personal loans and using technology in the credit segment helps the customers big time. The fintech platform enables the customers to repay the amount through various digital instruments such as e-NACH, payment gateways, and debit mandates. Institutions also cater to the customers’ satisfaction through their mobile applications and chatbots. This saves the time of the professionals and the cost of the firm as a whole
Availing instant personal loans is undoubtedly a very seamless process. However, there are certain eligibility criteria which shall be met by the prospective customers:
With all of the above facilities, it is clear that fintech companies have changed the way personal finance used to work a few years back. The use of the technology-driven process has made the tasks easier and quicker for all those associated with this segment.
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