Advancement in the fintech sector has led many players to come up with their own instant loan applications that allow people to borrow money in a hassle-free and faster manner thus, making the overall borrowing process in India a seamless experience for borrowers. This change has paved the way for digital lending. For the uninitiated, digital lending is a process of lending money over the internet where each step involved in the regular loan application process is being done online. With several personal loan app in the market, borrowing money has never been that easier before. Here is how instant loan apps have revolutionized the credit scene in India:
Borrower friendly approach: Apps such as Lazypay has made the whole lending process quite a borrower-friendly, be it with their instant customer support, getting to know the eligibility criteria on a tap, getting a loan even at a low CIBIL score, being able to apply for a loan at any time of the day benefits. They usually either operate through a web portal or a smartphone application which allows people to access personal loans without needing them to visit their bank multiple times, and if eligible, the loan app will disburse funds within hours. In some ways, this is also beneficial for lenders as they do not have to bear the cost of establishing and operating a point of service. This is where they have truly outdone banking institutions with their user-oriented policies.
Not making the application process a tedious task: Personal loan app has made sure that one can avail of a loan with minimum paperwork provided they are eligible for it. The introduction of the e-KYC has further made it convenient for the banks as well as for borrowers to have their identity and demographic details verified online and, upon satisfaction, can get the loan approved much quicker as compared to banks. For instance, a digital lending platform such as Lazypay only requires your bank details, photo ID, address proof, and photo to start the loan application process online.
Evaluate the borrower’s profile on different data: Traditional lending platforms evaluate the borrower’s profile on multiple factors such as tax returns, credit profile, past credit history and repayment schedule, bank statement, etc. Evaluation of these metrics can take weeks and sometimes months, especially if you have a low CIBIL score. Personal loan app and other instant loan apps have been a game-changer in this aspect as it only requires a few details from you, such as your age, city, salary, etc., to quickly evaluate the date and ascertain your credit profile.
The idea that people can borrow using these instant loan apps and get the required amount with minimum to no paperwork sounds quite easy but beware. This year Google India recently reviewed several personal loan apps and removed those that violated its user safety policies. Those apps require basic information from customers and issues loans in a jiffy. In case you default on the payment, defaulters are forced to pay a fixed late fee per day along with interest. To ensure you avail of personal loans from credible apps such as Lazypay, remember the following points in mind before taking credit from loan apps:
- Borrowers should verify the credentials of loan apps they are taking a loan from and check whether they are RBI registered for disbursing the loans or not. Along with this, they should visit the lender’s website and check whether they are a properly incorporated Indian entity with a certificate of registration before downloading their mobile application. This is important to prevent yourself from falling prey to any fraudulent activities.
- Legitimate personal loan app conducts a standard KYC involving an Aadhar card, mobile number verification, PAN. As per the mandate by RBI, the customer needs to sign a loan agreement form with a registered bank/NBFC. These critical steps are missed out on by the fraud companies.
- Consider it a red flag if an application is asking for your contact’s data which most of the illegal apps had been doing as coercive collection attempts. Illegal “instant loan apps” entice borrowers by offering lower interest rates. Thus, it is recommended you visit a handful of websites to find out the average interest rate on a personal loan, and if they are offering a very low-interest rate on a personal loan, then it is probably a too-good-to-be-true company.
- You might want to rush the application process and get the loan disbursed but wait before you click the “Proceed” button and read the terms and conditions thoroughly. A credible personal loan application such as Lazypay will have a long and clear document they want you to sign before proceeding, but a shady company, on the other hand, might not even have such a document in the first place.
- If the chosen loan application, such as Lazypay, is letting you know the true cost of a personal loan, such as prepayment charges, late payment fees, etc., before you sign the agreement, then they truly value transparency and full disclosure. You can avail personal loan from those companies.
So we are saying,
In case of a loan requirement, be it personal/home/car/ or any other type of credit, banks from a very long period are considered the go-to place for Indians. Due to their dominance in the credit market, a credit gap has been created, which apps like Lazypay are trying to break in. Earlier, taking a loan, be it any kind, required multiple visits and a tedious amount of paperwork. Even after going through the process, it wasn’t clear to the borrower whether they were eligible for the said loan amount or not.The personal loan app has given transparency through which prospective borrowers can instantly know whether they are eligible for the said amount or not via a tap. However, several “instant loan application” players have emerged in this market, and one has to be mindful of which loan application they choose to go with. Check whether the loan provider is approved by the RBI to lend money or not and do not fall for “quick loans” claims; those companies are mostly fake.