Fintechs are redefining the lending space in India: Aditya Kumar

Fintechs have largely adopted a paperless process thanks to technological advancements in the lending space.

Technology has played a big part in the Fintech space. Most present-day lenders are leveraging technology to achieve phenomenal results for making access to credit simpler and more convenient to consumers. Viewing and vetting consumer data more effectively has also been a definitive consequence of deploying powerful technology tools. From the lens of the consumer, getting a personal loan has never been this easy. Online documentation has dramatically reduced the turnaround time and digital verification methods along with alternative scoring techniques have allowed lenders to view consumer profiles more comprehensively than ever.

How technology has been a defining aspect in the way consumers access loans today:

Instant approval on personal loans:

A major breakthrough that technology has helped achieve is by allowing both lenders and borrowers to know if they qualify for credit instantly. This bodes well with both the lender and the consumer, as it saves a great deal of time. Additionally, the accuracy of the outcome (approval/rejection) is certainly high when powerful technological tools and in the form of fool-proof risk-evaluation algorithms are deployed to conduct profile analyses. As a matter of fact, the instant approval feature is what has made these loans extremely sought after in the credit market today. It can be rightly said that instant loans these days are fast surpassing the popularity of credit cards thanks to higher sanctioned loan amounts and alternative scoring methods. Let’s look at the aspect of alternative scoring next..

Alternative scoring methods:

Fintech lenders, particularly the more popular ones, use alternative scoring techniques to take a more comprehensive look at consumer profiles while determining their creditworthiness. Aspects like a consumer’s social standing, income, region of residence and type of profession, among others, are also carefully evaluated along with his/her credit score and repayment history. The credit report of consumers is broken down into multiple facets to gain a more meaningful and insightful view of how worthy a consumer is. Of course, instances of defaults and late payments can certainly hamper approval chances, but these aren’t the only parameters that are actually evaluated to understand the real value of a consumer and his true repayment capability.

Online documentation and digital verification of profiles:

Fintechs have largely adopted a paperless process thanks once again, to technological advancements in the lending space. If you wish to get an instant loan in the present, you no longer have to submit a bunch of physical documents to kick-start your application process. All you’ve got to do is visit the lender’s website and upload your salary slips and documents online. Also, you don’t need to download your statements from the bank – you can directly upload your statements through a secure process – you just have to sign-in with your internet banking credentials on a third party secure web interface. The lender can then directly access your statements to view your salary credits for the last few months. Most lenders require you to upload your bank statements for the last 6 months and salary slips for the last 3 months.

Fintech lenders have been able to effectively employ technology and leverage it to achieve transformative results in the lending space.

[This is an authored article by Aditya Kumar, Founder & CEO of Qbera, a fintech that caters to salaried individuals across 180 locations spanning 15,000 zip codes, offering loans from INR 1 lakh to INR 15 lakh.
All views, opinions and expressions are personal and limited to the author.]