Are you getting worried because you have to pay important bills or a sudden expense came up and you are low on funds? The first instinct may be to ask family or friends. If the amount is high, you could decide to apply for a bank loan. But now, there is a third option – online money lending apps.
Several fintech companies are offering instant loans with competitive interest rates and tenure durations. Applying for a loan with these fintech companies isn’t just easy but also quicker than traditional options like banks.
Broadly, the term fintech is used to describe any company that is into financial technology.
It encompasses companies that provide financial services using the internet, software, mobile devices, cloud services or any other kind of technology.
MoneyTap is a Bengaluru-based fintech company. It disrupted the digital lending business by offering lines of credit in the form of personal loans for consumers, in partnership with RBL Bank. It recently received an NBFC licence, which they intend to use to enter into co-lending space with their lending partners. This allows them to offer better interest rates to customers.
MoneyTap has been offering quick collateral-free personal loans to borrowers since 2016. One of its notable features is that it has a very simple documentation process for getting a personal loan. The mobile app also allows you to keep track of all the borrowings.
Capital Float is owned by CapFloat Financial Services and it offers specialized financial loans and credit to businesses. This fintech company uses its own proprietary loan underwriting systems to lend to potential borrowers.
It has partnerships with clients like Uber, Paytm and Shopclues. It is now aiming to reach out to kirana store owners and small-time merchants.
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MobiKwik was founded in 2009 and it started as a digital payments company, where it provided a phone-based payment system.
The company eventually grew into a digital financial services platform and boasts of a customer base of 100 million.
This Bengaluru-based fintech startup allows borrowers to avail a loan within the range of Rs.75,000 to Rs.5 lakh. They aim to provide loans to the underserved segment in India.
They offer an easy documentation process, where an agent will pick up the documents at a pre-scheduled date and time.
Founded in 2014, LendingKart’s primary mission is to make it easy for SMEs (small and medium enterprises) in India to have easy credit access.
It operates as an NBFC, and focuses on the MSME lending and capital space. LendingKart uses big data analytics to help lenders determine a borrower’s creditworthiness. It also completes the loan disbursal process much quicker than the traditional banks.
Faircent is India’s first RBI registered peer-to-peer lending marketplace where an individual can lend money to a borrower. Their mission is to provide a platform that connects those in need of credit with institutions and individuals who are willing to lend.
Their technology speeds up the process and the borrowers can get the required funds at affordable interest rates. The lenders also get the best possible return on their investment.
NeoGrowth offers business loans to SMEs and funds small and medium-sized retailers and online vendors in the country. It has over 6000 registered lenders and 30,000 borrowers. It has an average of Rs. 1 crore loan disbursals every month.
InstaKash is a personal loan app that has a simple process when it comes to lending money. It currently offers business loans and lines of credit to small businesses. They have made the application process really simple and fast.
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IndiaLends is a fintech platform whose objective is to reorganize the unorganized lending sector in the country using its underwriting technologies and techniques.
It helps SMEs and self-employed individuals get unsecured loans at fair rates of interest easily.
This is an online platform which offers customized loan products to a younger segment like millennials and underserved audience. If you are a salaried professional, you can get approved for instant, flexible loans from LoanTap. You can choose, compare and customize loans from various offerings such as a personal loan.
There really is no better time than now in the lending and borrowing space. With so many apps for a personal loan, you can apply for a personal loan or a business loan with ease.
Editor’s Note: We firmly believe that these top 10 Fintech companies have grown as they have adapted to the digital business. CloudBankin supports financial institutions through digital transformation.
Amid our dynamic financial ecosystem, the Open Credit Enablement Network
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After smartphone penetration, people are not watching their SMS at all. They use SMS only for OTP related transactions. That’s it.
But What can a Lender see in your SMS after you consent to them?
Lender can see income, expenses, and any other Fixed Obligation like (EMIs/Credit Card).
1) Income – Parameters like Average Salary Credited, Stable Monthly inflows like Rent
2) Expenses – Average monthly debit card transactions, UPI Transactions, Monthly ATM Withdrawal Amount etc
3) Fixed Obligations – Loan payments have been made for the past few months, Credit card transactions.
It also tells the Lender the adverse incidents like
1) Missed Loan payments
2) Cheque bounces
3) Missed Bill Payments like EB, LPG gas bills.
4) POS transaction declines due to insufficient funds.
A massive chunk of data is available in our SMS (more than 700 data points), which helps Lender to make a credit decision.
An interesting insight on vehicle loans for lenders.
A trend we are seeing today – the first-hand vehicle ownership is decreasing with time. Why? People are upgrading their vehicles in every few years because of technological advances. And, this can be seen more with the millennial generation.
So, what should a lender do in terms of financing?
– Estimating the residual value of the vehicle at the start of the financing period.
– Charging a borrower only for the residual value (which is the difference between the value after a few years and the current value)
Example: A bike currently is INR 1 lakh. You want to buy the vehicle for 2 years. A lender will estimate the residual value of that bike today and what it would be after 2 years. If the estimated residual value = INR 45,000, the lender will charge you only that (say, INR 55,000 with interest for this instance) during your tenure.
At the end of 2-year period, you have 3 choices:
1. Return the bike and upgrade to a new one without going through the struggle of selling it.
2. Pay the lump sum remaining amount to own the vehicle outright.
3. Extend the financing and own it by keep paying the EMIs for the remaining amount of the vehicle for the next 12 or 18 months.
Benefits for the borrowers?
– Flexibility to use a vehicle and upgrade to a new one.
– Affordability to not pay for the complete value of the vehicle with the intention to use for a lesser amount of time.
– Convenience in owning the vehicle.
Say goodbye to the old lending option and embrace the new way of financing for vehicle by lenders!
How many of us know this?
1) Tiktok does Lending ( is it an entertainment company or social media company or a fintech company?
2) Youtube China does Lending
3) Top 100 internet companies in China(no matter what business they are in) do Lending
The team which was heading Lending in Tiktok was the Advertisement team. If we do Ads, we do X no of revenue. But if we do lending, we’ll get X+30% more revenue. This is on the same Ad spot.
Ad team has transformed into a lending team, and in today’s world, it’s possible because the subject matter expertise can be put in as an API and given to you.
Embedded Lending as a service is becoming popular in India too, and I am happy to be part of this ecosystem.
The answer is No. Only the top 10 crore people have access to many credit products in India. Almost all Banks focus on this market.
Once you go beyond that, the credit access rate has dropped significantly due to multiple factors.
1) Customers who are having low income(30-40K per month)
2) Not earning from an employer who belongs to Category A or B
3) Not from Tier 1 or 2 cities
NBFCs and Fintechs focus on the above segment, pushing another 10 crores of people.
But in India, 70 crores more people are formally or informally employed, which still needs to be tapped.