Fintech lenders have become extremely popular in recent years, and for good reason. Industry experts claim that these platforms have made obtaining loans instantly accessible with minimal paperwork.
Madhusudan Ekambaram, co-founder and CEO of KreditBee and co-founder of FACE, said: “People in need of a quick loan can turn to fintech lenders as the eligibility requirements are not strict and the conditions are often better than those offered by traditional banks.
Borrowing money through fintech is generally a smooth process if certain guidelines are followed.
Here are some factors to keep in mind before getting a personal loan from fintech lenders:
Maintain a good credit rating: Maintaining a good credit score is always a plus when obtaining any type of loan. Even though many fintech lenders look beyond the credit score, it is still an important part of the assessment process.
Ekambaram says “It is a good idea to maintain a balance between your secured and unsecured loans and to pay your dues on time for a good credit score.”
Read the fine print: Not reading the fine print can be a costly mistake, so try to avoid it at all costs. Especially when it comes to repayment terms, most tend to overlook the fine print. Review the terms and conditions, check the fees that will be imposed on you in the event of non-payment or in the event of late payment in particular.
Ekambaram adds, “A FinTech company is legally required to post all of its terms and conditions on its website. Before opting for a loan, read the costs, terms and conditions of the business (especially for defaults or late payments).
Credibility of the lender: Experts say that a lender’s credibility is one of the first things a borrower should consider when choosing a lender, among other things. Ekambaram says: “Any potential borrower should make an effort to learn as much as possible about the lender. They can look at testimonials from past clients and read positive and negative reviews to see if a lender is up front and honest with their clients. Therefore, try to have access to as much information as possible before making a final decision.
Consider factors other than interest rates: Many loan providers charge hidden fees which can cause problems for the borrower in the long run. Experts say it’s essential to read the fine print and be aware of any additional fees that might be imposed. Examples of such charges are processing fees, prepayment charges, and late payment charges.