New to credit? Things to keep in mind when taking out a personal loan from Fintech lenders

It’s a good idea to maintain a balance between your secured and unsecured loans and pay your dues on time for a healthy credit score.

Fintech lenders have become extremely popular in recent years, and for good reason. Industry experts claim that these platforms have made obtaining loans instantly accessible with minimal paperwork.

Madhusudan Ekambaram, co-founder and CEO of KreditBee and co-founder of FACE, says, “People in need of a quick loan can approach fintech lenders as the eligibility requirements are not strict and the conditions are often better than those offered. by traditional banks.

Borrowing money through fintech is usually a smooth process if certain guidelines are followed.

Here are some factors to keep in mind before getting a personal loan from Fintech lenders:

Maintaining a good credit score: Maintaining a good credit rating is always a plus when obtaining any type of loan. Even though many fintech lenders look beyond credit score, it is still an important part of the assessment process.

Ekambaram says “It’s a good idea to maintain a balance between your secured and unsecured loans and pay your dues on time for a healthy credit score.”

Read the fine print: Not reading the fine print can be a costly mistake, so try to avoid it at all costs. Especially when it comes to repayment terms, most tend to overlook the fine print. Review the conditions, check the fees that will be imposed on you if you do not make your payments or if you make a late payment in particular.

Ekambaram, adds: “A fintech company is legally required to publish all of its terms and conditions on its website. Before deciding on a loan, read the company’s costs, terms and conditions (especially for defaults or late payments).

Credibility of the lender: Experts say a lender’s credibility is one of the first things a borrower should consider when choosing a lender, among other things. Ekambaram says, “Any potential borrower should make an effort to learn as much as possible about the lender. They can look at testimonials from past customers and read positive and negative reviews to see if a lender is upfront and honest with their customers. Therefore, try to have access to as much information as possible before making a final decision.

Consider factors other than interest rates: Many loan providers charge hidden fees that can cause problems for the borrower in the long run. Experts say it’s essential to read the fine print and be aware of any additional fees that may be imposed. Processing fees, prepayment fees and late payment fees are examples of such fees.

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Sara R. Cicero