Here are the main advantages of FinTech loans
New age fintechs are transforming the financing space and making loan processing more convenient than traditional banks. In addition to instant loan processing, fintechs offer customized products to meet borrower requirements. Using technology, these companies not only make credit more accessible, but also provide a refined customer experience.
Here’s a look at some of the main benefits of taking out loans from fintechs:
FinTechs offer faster loan applications, approvals, and disbursements, which can take weeks at traditional banks. This is possible because some fintech lenders use AI-based models to check a borrower’s credit score and repayment history.
âUnlike traditional lenders, fintechs use advanced AI models based on efficient underwriting algorithms to leverage alternative data to assess borrowers’ present and future cash flows and assess their ability to repay more. effectively, âVivek Veda, co-founder of Fintech Association for Consumer Empowerment, said Outlook.
Less paperwork: Fintech lenders take advantage of e-KYC to obtain digital signatures on loan agreements from borrowers. The borrower can also upload documents like PAN card, Aadhaar card, pay slips and bank statements for loan processing on the digital lender’s website or app. This guarantees less paperwork and a quick disbursement of the loan.
Unsecured loans: One of the main advantages of taking out loans from fintechs is that they do not require collateral. This is useful for small entrepreneurs.
Loans for new borrowers: Digital lenders offer loans, ranging from Rs 15,000 to Rs 10 lakh, to new credit borrowers, unlike risk-averse banks and NBFCs.
Competitive rates and flexible occupancy duration: Fintechs offer loans at very competitive interest rates in the market. Borrowers also benefit from flexibility in the repayment term. While traditional banks charge the borrower for a portion or prepayment of the loan, fintech companies offer the option of paying no partial or early fees.
Transparent process: Applying for a loan and approving a fintech lender is an absolutely transparent process. The client is always updated with messages or emails.
First publication: STI