How Online Personal Loans are Changing the Whole Financial Industry

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How Online Personal Loans are Changing the Whole Financial Industry

According to a recent publication, consumer and online personal loans have an 87% share in NBFC-Fintech active loans. Personal loans have contributed to an increase in YoY outstanding portfolio value.

With real-time solutions and innovative products, Fintech Lending has changed the way credit delivery is approached in India. Despite the pandemic, as of September 2020, the industry has registered a YoY growth of 38%.

In the new normal, the Fintech lending industry will play an invaluable role in shaping the future of the credit industry.

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A Shift to Financial Digital Infrastructure

Primarily, retail lending in India has involved in-person interactions throughout the loan process lifecycle, from sourcing to disbursal. The pandemic has forced lenders to shift to a digital process.

Top lenders have had to realign their processes and digitise their customer journeys. This includes

  • Contactless processes to receive and process loan applications
  • Personal loan EMI calculator
  • Transaction analysis that relies on machine learning
  • Using video KYC to verify customers
  • Collections that are enabled by voice bots 

Moving to an online process has also helped lower the overall company costs. However, investing in digital infrastructure is not cheap. Fortunately, the widespread adoption of retail loan online distribution has offset the cost to build digital retail lending infrastructure.

Top lenders are now partnering with IT firms for solutions in commerce, advertising, analytics, and marketing that are driven by artificial intelligence. Thanks to these initiatives, customers can now enjoy tailor-made digital journeys.

Borrowers can digitally apply for an instant personal loan any time of the day. They can use any smart device to conduct their business and complete the loan application process from home.

Must Read:5 Tips to Qualify for Personal Loan for Salaried Employees in India

Fintech is Changing the Personal Loan Industry

The fintech industry has made personal finance convenient, faster, and easier. Customers are no longer subjected to a tedious application process. They also do not have to wait in long queues to have their line of credit or personal loan approved.

Customers looking for personal loans are increasingly turning to Fintech solutions. Several factors make Fintech companies and NBFCs better alternatives to traditional banks.

Transparency

These lenders offer a level of transparency to their customers that traditional lenders cannot.

When modern consumers borrow money, they also want to track their loan repayments and understand the best possible ways in which they can manage their loans better and more conveniently. money. Modern day companies like Fullerton India understand this need of their consumers.

With the help of seamless technological integration with other applications and services, new age lenders like NBFCs and Fintech  companies can provide an unparalleled level of transparency to borrowers.

Must Read:5 Simple Tips to Reduce Personal Loan EMI Burden

Understanding Consumer Requirements

Each consumer has unique financial needs. They also possess a unique financial behaviour and history that can predict future spending and repayment patterns.

New age lenders analyse vast amounts of data to segment their customer base. They also use this data to build financial personalities that reflect these segments.

This research enables Fintech ventures and NBFCs to design products that are customised to meet the needs of the customer base. It helps them create a personal line of credit, a marriage loan, or a personal loan that caters to the specialised requirements of their customer segments.

Debt Consolidation

Advanced financial technology and fintech innovations drive the modern consumer lending industry. This allows them to offer debt consolidation solutions that are reliable, of high quality, and well-equipped.

The modern consumer is tech-savvy. If they get better terms and conditions from a different digital lender, they will not hesitate to switch between lenders.

Despite this trend, the debt consolidation solutions market is unlikely to stagnate. Even after debt consolidation, customers may need more money for evolving spending habits, increased cost of living, unforeseen life events, and emergencies.

Lenders are acutely aware of this trend. To engage their customer base, they offer many debt consolidation solutions.

Same Day Loan Disbursal

Fintech companies do not just provide loans that are instant. They provide loans on the same day of application!

After your documents have been digitally verified and your application approved, the loan amount will be disbursed on the very same day.

Digital Verification

Fintech companies leverage digital technology such as personal loan eligibility calculators to deliver the best experience and service to their customers. The entire personal loan application process is augmented by digital technology.

After a borrower applies for a loan online, all the documents are verified digitally. The approval or rejection of the loan is also conducted online in a matter of seconds.

The pandemic has only accelerated the adoption of digital technology in the lending industry. With fintech apps offering advantages to borrowers that brick-and-mortar banks cannot, customers are unlikely to revert to traditional forms of credit transactions post-pandemic.

Application of technologies such as artificial intelligence, machine learning, and big data will only help popularise digital lending apps and fintech companies in hitherto untapped markets.


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*Terms and Conditions apply. Loans are disbursed at the discretion of Fullerton India.