In recent years, fintech lenders have become extremely popular. These platforms have made it possible for people to get loans instantly with minimum paperwork.
Madhusudan Ekambaram, Co-Founder and CEO, KreditBee and Co-Founder of FACE, says, “People in need of a quick loan can take the help of fintech lenders as the eligibility requirements are not stringent and the conditions are often better than those offered by traditional banks.”
Praveen Sinha, Founder and Managing Director of Pincap also shared his thoughts – “In the light of being in a consumer centric world where companies are working seamlessly to make their products available with easy finance options, fintech sector has paved way with unique solutions like web and mobile apps to get quick loans with minimum paperwork unlike traditional banks”
Using fintech to borrow money is typically an easy process if certain guidelines are followed.
There are a few things to consider before getting a personal loan from a fintech lender:
Maintaining a good credit score: It is always beneficial to maintain a good credit score when it comes to obtaining any type of loan. Fintech lenders may look beyond the credit score, but it remains an important factor in an evaluation.
Ekambaram, says “It is a good idea to maintain a balance between your secured and unsecured loans and pay your dues on time for a healthy credit score.”
Read the fine print: Not reading the fine print can be a costly mistake, hence, try to avoid it at all costs. People tend to overlook the fine print, especially when it comes to repayment terms. Examine the terms, check the charges you’ll be forced to pay if you don’t pay or if you make a late payment in particular.
Ekambaram, adds, “A fintech company is legally required to publish all of its terms and conditions on its website. Before opting for a loan, read the company’s costs, terms, and conditions (particularly for defaults or late payments).”
Lender’s credibility: Experts say, the credibility of a lender is one of the first things a borrower should look at when choosing a lender, among other things. Ekambaram says, “Any prospective borrower should make an effort to learn as much as they can about the lender. They can look at testimonies from prior customers and read both positive and negative evaluations to see if a lender is straightforward and honest with its customers.” Hence, try to get access to as much information as possible before making a final decision.
Consider factors other than interest rates: Many loan providers charge hidden fees that can cause problems for the borrower in the long run. It is very important to read the fine print and be aware of any additional charges. These charges include processing fees, prepayment fees, and late payment fees, among others.