With respect to personal loans, fintech players play a noticeable role in the Indian lending landscape.
When you stare at the shortage of money for such reasons as an unpredictable emergency, vacation, or wedding celebration, you can apply for what is known as a personal loan. Although the go-to place for a personal loan is a commercial bank, one can try their luck with a fintech platform in case the bank turns down your application.
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Let us first understand what is a fintech platform:
What is a fintech platform?
A fintech platform is the one that uses technology to widen the net of banking. This includes an app or website that helps you do banking on your phone. It makes it easier to handle money without having to go to a bank. Lately a number of fintech platforms have surfaced which offer loans to borrowers.
Their interest rates are typically higher than what the commercial banks charge. Over 59 percent of total personal loans disbursed by fintechs are given to borrowers aged less than 35, the RBI data showed.
However, borrowing personal loans from a fintech platform has a slew of advantages. These include the following:
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A. Smaller amount: The amount of loan offered by fintech platforms are usually smaller. One can borrow an amount as small as ₹10,000 from a fintech platform.
B. Ease of borrowing: Since borrowers typically borrow from fintech platforms in scenarios where banks don’t fulfill their need. So, the process of borrowing from a fintech platform is easier when compared to that of a bank.
C. Online borrowing: The entire process of borrowing a loan is online, thus making it simpler and convenient to an average borrower.
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Although personal loan is an unsecured loan, therefore there is not much at stake, yet it is advisable to compare the interest rates charged by different fintech players so that you do not pay extra on account of interest rates, processing charges and pre-payment charges.
For personal loan, arrange the following documents:
A. PAN for KYC
B. Address proof such as electricity bill, bank statement
C. ID proof such as a voter ID or aadhaar
D. Three months’ salary slips
Interest rates charged by top 10 fintech platforms:
1. Upwards: Upwards by Lendingkart offers personal loans up to ₹5 lakh. The loans carry low cost EMIs starting from ₹2,500. The fintech platform claims that it entails quick approval, 100 percent paperless and no collaterals.
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The platform charges interest rates in the range of 18 percent to 32 percent per annum based on CIBIL score. The platform charges a processing fee of up to 2 per cent of the loan amount. The repayment period is between 6 to 24 months.
2. Paytm: You can apply to Paytm to procure a personal loan from one of the lenders which include Hero FinCorp, Aditya Birla Finance and Tata Capital.
One can choose any loan amount from ₹10,000 to ₹5 lakh and convert into EMI. You can make timely repayment and become eligible for higher amounts. The loan application is quite simple: enter PAN number, get the loan offer and then share your bank account details.
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3. DMI Finance: DMI Finance ensures instant disbursal of personal loan, gives 100 percent digital loan and offers attractive interest rates. The pre-closure charges range from 2 percent to 4 percent. The tenure of loan can range from 3 months to 48 months.
DMI Finance enables borrowers to choose loan frequency of 3, 6 or 12 months. The personal loan is available to both salaried as well as self-employed individuals.
4. Money Tap: MoneyTap personal loans start at an interest rate of 1.08 per cent per month (i.e., 13 percent per annum). One can get an approved credit limit of up to ₹5 Lakh, but one doesn’t have to pay any interest until they transfer this money to the bank account.
5. Branch International: This RBI-registered NBFC offers loans up to ₹2 lakh on your smartphone. Initially, it gives a small amount and as you build your profile, the limit keeps increasing.
6. Satya Microcapital: It offers micro loans for an amount that ranges between ₹45,000 toRs 1,25,000. The loan tenure is 2-3 years. The processing fee is 1.5 percent plus 18 percent GST.
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7. KreditBee: It offers personal loan at an interest rate that starts from 17 percent per annum and goes upto 29.95 per cent. One can secure a personal loan for an amount that ranges between ₹1,000 to ₹5 lakh.
The processing fee is based on the loan amount, which ranges from ₹350 to ₹16,800. Loan disbursal can happen in as little as 10 minutes.
8. Paysense: It provides personal loans for an amount that can range between ₹5,000 to ₹5 lakh. The processing fee is up to 3 percent. The tenure can range between 3 to 60 months.
9. Finzy: One can apply for quick personal loans for an interest that starts at 10.99 per cent per annum. The loan amount can range between ₹25,000 to ₹5 lakh, and the loan tenure is between 6 months to 36 months.
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10. Groww: Groww Credit offers instant personal loans up to ₹10 lakh with flexible repayment options from 3 months to 60 months. Whether you are salaried or self-employed, you can get instant approvals and funds will be disbursed directly to your bank account.
The annual percentage rate (APR) is in the range of 13 to 48 percent.
