The importance of unsecured credit in a budding economy cannot be ignored. Credit penetration is an economy is absolutely crucial for its future growth and robustness. Instant Loans are a form of unsecured credit that are mostly offered by Peer to Peer Lending platforms and Fintech lending companies. These lenders work very differently from banks (we’ll find out how), and have grown to become way more popular than traditional lending institutions.
If we are to talk about the future of the lending industry, we cannot for once discount the role that instant loans as a whole have on the economy. As a matter of fact, thanks to the advent of instant personal loans from Fintech lenders, a larger number of people have been able to access quick and easy credit. The most important thing to note here is that these loans work very differently from how traditional banks function with relevance to the unsecured loan space. Traditional banks certainly offer unsecured loans, and at the most competitive rates even, but they take long to approve and disburse credit, and in most cases take at least 7 business days to disburse loan amounts.
Coming back to the topic of how instant loans are playing their part in helping credit penetration, we look at some distinct features of these loans that has made it safe to declare that these loans are the future of unsecured credit in India. It must be noted that in the recent past, this form of credit is almost as influential as credit cards, with an increasing number of consumers opting for instant loans instead of credit cards.
Why can we say that instant loans are the future of the unsecured lending space?
The reasons are many – starting from an extremely easy application process that boasts an entirely paperless model to economical rates of interest and super-fast loan disbursals. Quite frankly, Fintech lenders have quite the edge in today’s loan market, thanks to advanced and enabling technology that has helped make the loan process, smarter, convenient and absolutely seamless as is the case with most lenders offering instant loans in India. Here are some splendid advantages of applying for a loan with a Fintech lending company in India:
Easier eligibility norms: Fintechs have much easier eligibility norms when compared to traditional lenders such as state-run and some private banks. To qualify for instant credit from a Fintech lender, you will be required to have a credit score of just 600, this is way less when compared to the requirement commanded by private banks, requiring you to have a minimum credit score of 750 in order to qualify for instant credit.
Quick loan disbursal: With Fintechs, the turnaround time for loans is just 24 hours. For banks, however, it is at least 7 business days. If you compare the two, instant loans from Fintech lenders, due to their super-fast turnaround times, have become the primary options for individuals seeking urgent access to unsecured credit in India.
Owing to these aspects, a larger section of the populace has been able to access instant loans from Fintech lenders, and credit penetration has seen a tremendous upswing.