Most of us have experienced the tedious and time-consuming process of applying for personal loans through traditional financial institutions. Today financial services organizations, through the use of advanced technologies are riding the wave of data explosion supported by high penetration of internet and mobile penetration, thereby offering best-in-class products and services.
What is Fintech?
Financial technology (Fintech) is used to describe new technology that seeks to improve & automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. Fintech, the word, is a combination of “financial technology”.
How is the fintech industry changing the loan process?
When we are in need of a short term personal loan, most of us would normally approach a traditional bank or a financial institution. However, meeting the strict eligibility criteria of the financial institutions is not a piece of cake.
To serve the financial needs of the people, the fintech industry has emerged to change the lending process for the better by utilizing data and technology like artificial intelligence and machine learning. Here are some of the ways in which fintech have changed the personal loan process in India:
1. Alternate lending models
In the traditional lending model, lenders accept deposits from customers to extend loan offers to other customers. Fintech companies have disrupted the lending process by introducing peer to peer lending solutions. With the peer-to-peer lending model, there is no need to take a deposit at all. Instead, individuals can earn interest by lending to others. Fintech works on improving its credit appraisal models, further enhance its online lending strategy, and work on offering new financial products to customers at a lower cost.
2. Fast approvals
Whenever a customer applies for a personal loan, there are many fields to get your loan approved, failing on any step may lead to rejection of the loan application. And if the time taken is several weeks it can seriously make a customer irate. Fintech has developed a quick process that makes it easier for customers to get approval and receive the funds at the earliest.
3. Easy Application for Short Term Loans
One of the most important aspects is one can apply for instant quick loans online at the click of a button and get the necessary funds transferred The reason behind the success of fintech firms is they make the process simpler and easy to use.
This happens by removing the steps of asking unnecessary additional info from the customer, faster apps with easy to use interface for laymen, quick tracking info, complete digital solutions, quick response support teams.
4. No Physical Visit Required
For many years, whenever someone involves applying for a quick loan either has to make multiple visits to a bank or financial institution for applications, documents, approval visits, which many would agree becomes cumbersome at times. Moreover, there is a long list of documents that a bank requires when your loan is passed. So, technology was the need of the hour for applying and approval of a quick loan application process. Fintech personal loan apps have bridged the gap.
Usually, Fintech firms will not have those major blocks without compromising on safety and security. Yes, rightly said, its technology functions in a way that the loan process can be completed online without any physical visit required by firms like RupeeRedee to apply for instant loans.