How fintech apps have made personal loans mere a click away? Key points to know

Gone are the ways when securing a personal loan used to be a long-drawn process of sending an application along with a barrage of documents and then waiting for a long time to get an approval. Thanks to a host of fintech apps, securing personal loans is just a tap away.

All you need to share is your phone number, and after eKYC, the money can be instantly transferred to your bank account subject to approval, of course. And all this can be done in 20 minutes? Sounds incredible but true. This is possible and happening all around.

Let us understand more about the phenomenon which has caught up and continues to grow. If someone wants to use a fintech app to raise a loan, these are some of the points to remember.

Personal loan via fintech app: Points to remember

I. eKYC: Fintech apps utilise digital KYC verification which requires applicants to submit only Aadhaar and PAN.

II. Interest rates: There could be differences in the interest rates charged by fintech apps vis-à-vis banks. And typically, banks charge the lowest interest rates in comparison to fintech apps.

III. Data with lender: Raising a loan from an app means you share your phone data with the loan provider. So, you must be prepared for it. You may want to go the traditional route if you are too reluctant to share your data with the loan service provider.

IV. Authenticity: Another pertinent point to remember is to check the authenticity of digital lending apps. Usually the app is a mere platform and there is a lending institution behind it. So, it is important to exercise due caution and make sure that the lender which is disbursing the loan is registered with the RBI.

V. Reviews of app: In the era of social media and reviews, it is also important to check the reviews of apps and see the number of downloads to make sure that you borrow only from a legitimate app.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.

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