Getting a loan has always been considered to be a complicated task for the average borrower. The traditional lending model has so many problems that it would not be wrong to say that it is uncompetitive and creates more problems than it can solve. However, the advancements in technology have brought forward a unique solution. The rise in personal mobile devices such as smartphones and high-speed data connectivity over 4G networks has given rise to several app-based financial services. You can now get an instant cash loan from a lender who runs the entire process digitally on a mobile phone app. Here are a few reasons why these lenders are poised to beat traditional financial institutions at their own game.
They are fast: The borrowing process with a cash loan app is very fast. A traditional lender will take days, if not weeks, from when you fill the first form to actually giving you the money you need. There will be steps upon steps of checks, phone calls, office/home verification visits and whatnot. On the other hand, an app-based loan does the same process in a matter of minutes. Since there is minimal to no human intervention, the process is done with higher accuracy and that too faster.
They are flexible: Traditional lenders and financial service providers are bound by a lot of restrictive regulations and are therefore very rigid. They are simply unable to keep up with the fast-paced changes of technology and are unable to pass on its advantages to their customers. Meanwhile, the app-based lending system brings numerous advantages such as a high degree of flexibility in both loan tenure and loan amounts. Also, these modern fintech companies are working hard to make the borrowing process as simple as it can be while at the same time ensuring legal compliance. Their goal is to cut the waste in the lending process and be able to serve more and more people.
They are easily accessible: Unlike a traditional lending institution which requires you to have a considerable backtrail in the formal financial system, the cash loan app is very accessible. Credit is made available to even the new borrowers who have just entered the formal financial system. Using digital KYC systems such as online and mobile OTP based Aadhaar authentication and already prevalent government identity systems such as PAN cards, an instant loan app makes it possible for everyone to borrow money in a simple and fast manner. No jumping through hoops or messy documentation work when you need instant funds.
24×7 lending services: Talking about money when you need it, these apps are also not restricted by the time and work round the clock, 365 days a year. A traditional lending company, with its offices and ranks upon ranks of working staff, tends to operate in a 9 am to 5 pm model where lending happens only during business hours. What if you need money for a medical emergency in the middle of the night? This problem is solved by the app-based lending models. The app does not require human backend staff for routine operation and thus, you can borrow money at your convenience.
No physical interaction: No need for any kind of physical interaction is another big advantage of modern fintech. If you want to borrow money from a traditional financial institution, you will have to visit their office, meet someone, fill up a file full of forms and then someone will visit the addresses you mentioned to verify your details. Not only do all these steps take time, but they also make an absolute hassle of the entire process. All these problems are eliminated by loan apps. You do the entire process without ever having to know where the office of the lending company is located. For all you may need to care, the office may not even be in the same state as you are in and you will get your money in a matter of minutes.
Small loan sizes available: One big problem with traditional lenders is that they are so bloated by their own bureaucratic processes that they have to lend a rather large amount of money before they can cover the high lending costs from their side. While this is in itself a situation that people have learnt to live with, it has created a big problem for the small ticket borrowers. Not everyone needs lakhs of rupees of loans; the small borrower segment is many times bigger than the traditional loan market. App-based lenders have become the best solution for such borrowers because they have minimal overhead costs.
No usage restrictions: Finally, whereas traditional borrowers tend to regulate the purposes for which they lend the money, app loans are not restrictive in the end-usage. Being firm believers in consumer choice and working on efforts to make credit available to the widest number of people when they need it, fintech companies allow complete freedom to the borrower about how, when and where they want to use the borrowed amount. The money can be used for medical emergencies, home improvement plans, spend on holidays or even to buy new or used vehicles.
With the evolution of technology, more and more people are now able to have access to financial support on a need basis with minimal cost as and when they need it.
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