Over the past few years, the rise of fintechs has changed many people’s approach to banking. Besides payment services, people have also started to use fintech apps for instant personal loans.
While traditional banks take days (sometimes even weeks) to process personal loan applications, fintechs provide funds with just a few clicks. However, meeting certain criteria helps an individual enjoy a smooth loan process. These include:
To ensure that your instant loan application is approved within a short period of time, your credit score – based on repayment history – must be 750 or higher. A score of 750+ assures the bank that you are making timely repayments, thus making you a creditworthy customer. While fintechs also offer instant loans to those with a credit score below 750, the interest rates for these customers are generally higher.
Prepare all the documents you need to upload
A fintech requires the loan applicant to upload documents such as bank statements, proof of address and identity, and photographs, among others. Keeping these documents in your device helps you complete the online loan application process in minutes. Most fintech platforms retrieve KYC details digitally via your original documents.
Check the lender’s eligibility criteria
Different fintechs have different eligibility criteria for extending personal loans. It is therefore advisable to check the criteria beforehand. Eligibility can also be verified on any financial portal (like Bajaj Finance, Bankbazaar and others) showing monthly income, monthly expenses, employer, date of birth and city of residence, among other details. .
As they say, don’t bite more than you can chew. When applying for a personal loan, be aware of the EMI that you can repay comfortably. Don’t take more loan than you really need, even if you are eligible.
Read the terms and conditions
Probably the most repeated and yet the most crucial piece of advice is to always read all of the terms and conditions carefully before signing a loan agreement online. This helps to avoid (mostly unpleasant) surprises later.
(Edited by : Thomas abraham)
First publication: STI