New Delhi: Bengaluru-based start-up MoneyTap on Wednesday launched an app-based credit line as a facility for consumers to borrow money up to Rs.5 lakh or even as little as Rs.3,000 at low interest rates for flexible tenure.
“The “Credit Line” means that bank will issue a limit of upto Rs5 lakh, without any collateral or charging any interest,” MoneyTap said in a statement.
The fin-tech start-up said that these loans can be repaid in equated monthly instalments (EMIs) over a period of two months to three years.
The company has partnered with banks such as RBL Bank to facilitate credit line services and claims it to be the first such service in India. The app is available for all salaried employees across metro cities and plans to expand in other cities in the next few months. The company plans to partner with other banks as well.
The rate of interests for loans vary from 1.25 -1.5% per month and the app has a set-up fees of Rs.499-plus taxes to be paid to the bank.
To avoid creating a credit bubble, the customers willing to take a loan will need to be qualified to apply for a loan and the approval for sanctions will come from banks after verification of identity and other details.
“Customers can ship online or swipe at a store, one tap to transfer money to the account instantly, 24x7; they can covert card spends to EMIs,” the company said.
From the banks’ perspective, these loans will be unsecured advances and will help widen the customer base by extending smaller loans.