Through its instant-loan app, digital lending platform mPokket allows any college student (no credit history is required) to borrow money.
Everybody wants to buy gift items on Diwali be it for self or for near and dear ones. To catch maximum possible share of the festive spendings, companies shower discounts and attractive deals making purchases during Diwali more lucrative. Although students tend to enjoy the festive occasion most, in the absence of any stable source of income, ability to spend, however, is a major constraint for them.
To enable them to buy things of their choice, mPokket, a prominent digital lending platform, comes up with short-term personal loan offer for college students that may be availed in a hassle-free and seamless manner.
Through its instant-loan app, mPokket allows any college student (no credit history is required) to borrow money, eliminating the need for the time-consuming as well as the paper-heavy process of obtaining loans from traditional sources.
With its reach in more than 5000 colleges and 200 cities across the country, the digital fin-tech platform hopes to achieve annual disbursal run rate of Rs 1,000 crore in 2019.
The registration procedure is quite simple; the loan applicant just needs to fill relevant personal information and submit documents online. Once the information is verified, the user is assigned a certain credit limit to start borrowing.
The credit limit is determined on the basis of demographic, social, behavioral, financial, and transactional factors. Borrowed amounts are delivered instantly to the student’s bank account or mobile wallet. Moreover, the borrowing limit of the user can go up over time with good usage.
Gaurav Jalan, Founder & CEO, mPokket said, “mPokket’s mission is to use technology to enable cost-effective delivery of credit to segments of the population that are ignored by traditional financial institutions. Also, mPokket aim to become one of the top 10 technology-driven lenders in India.”
Jalan also said that the company is planning to launch new loans products soon to cater to the financial needs of young salaried professionals who have just graduated from college. Following this, the company will introduce loan products for micro-businesses and small entrepreneurs.
The tech-driven processes mPokket to disburse loans in an efficient, convenient, cost-effective, and instantaneous manner that as little as 30 minutes. To avail the loan, a potential borrower needs to upload documents such as address proof, identity details, college details and other basic personal information to complete the KYC process.
The loan disbursal amount can range anywhere between Rs 500 and Rs 10,000, depending on factors like for what purpose a student needs the money, whether he/she has a part-time job or any such source of alternate income, etc. The loans are disbursed for a repayment period of up to 3 months.
Taking into consideration many factors, mPokket decides the applicable rate of interest on case to case basis that starts at 3.5 per cent per month onwards, when repaid within the decided time frame. So, the minimum effective yearly interest rate will be around 52 per cent.
In case the loan is not repaid within the repayment period, a penalty gets added. Without mentioning the quantum of penalty or the rate of interest post loan repayment period, Jalan said, “We can’t provide a figure. We can say, if the loan is not paid within the repayment period, a higher penal rate of interest will apply until the loan is repaid.”
So, avail the loan only if you are in position to repay it on time. It is because, in case you are unable to pay back anything, the loan amount will become double within 1 year 8 months if only the minimum interest rate of 3.5 per cent per month is applied. If a higher penal rate of interest is applied, the amount to be repaid will grow even faster.