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.
Fintech lenders have become extremely popular in recent years, and for a good reason. Industry experts say these platforms have made getting loans instantly accessible with minimal documents.
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.”
Borrowing money through fintech is usually 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 score: Maintaining a good credit score is always a plus while getting any type of loan. Even though many fintech lenders look beyond the credit score, it is still an important part of the evaluation process.
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. Especially when it comes to repayment terms, most tend to overlook the fine print. Review the terms, check the charges that will be imposed if you fail to make payments 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. Experts say it is critical to read the tiny print and be aware of any additional charges that may be imposed. Processing fees, prepayment fees, and late payment fees are examples of these charges.