Technology has opened the way to automate processes and has boosted the financial industry in India. This is what gave the sector the capacity to grow and the potential to develop new ideas.

There was a boom in the financial, banking as well as insurance (BFSI) industries particularly flourished thanks to digital lending services that have revolutionized the lending process and methods of disbursement. Fintech technology has brought about the needed transformation of financial institutions and changed the way in which people work.

There’s been an increase in the number of people who are converting to digital channels for quick, personal, top-quality and secure services. A study conducted by Yourstory states that the fintech industry has huge growth potential and is predicted to rise to $150-160 billion in 2025.

In the wake of the pandemic, online lending has grown in popularity because of its online applications, the disbursal and the contactless feature. Both businesses and customers, benefit from this technological advancement. The digital revolution in the fintech industry has greatly transformed the complexity associated with these organizations.

Although the companies know how to attract customers, the customers too should be informed about the options that the digital lending sector has to offer them.

Here are five things the consumer should be aware of about lending via digital channels:

1. Lenders’ eligibility standards for the borrowers:

When making a loan application, one should look into the criteria for eligibility of the lending apps. You should ensure that they meet the guidelines that digital lenders have set for their customers. For instance, if a person lives in metro cities that they have to earn the equivalent of Rs. 18,000 per month. Similarly, for those who are not metro, they must earn the equivalent of Rs. 15000 per month, and reside in of India. If a customer fails to be sure of these details and is rejected by lender, repeatedly it could affect their CIBIL scores, too. In accordance with RBI rules, lenders will look on their CIBIL score of each credit or loan card applicant prior to the time of evaluating. The CIBIL score can range from 300 to 800, which determines the creditworthiness of a person.

Candidates must submit bank statements, addresses and ID documents, as well as photos to apply for loans. The storage of these documents on your device will allow you to complete the loan application online in just a few just a few minutes. Many lending platforms can retrieve the KYC information electronically through the original documents.

2. Plan your finances

It is recommended to create an annual budget in order to simplify the expenditure and eliminate unnecessary or unnecessary expenditures. A well-planned budget helps one to be able to live within your limits. However the unplanned expenses can add to the amount of debt before you are aware of what’s happening.

The ability to plan your repayment well is essential, regardless of any kind of loan. Make use of an internet-based personal loan monthly instalment (EMI) calculator to determine the monthly instalments , by entering the relevant interest rate as well as the required amount.

Before they can take out loans, customers must know every aspect of EMI including how much they will have to pay each month and the number of months they will have to cover. This will allow them to comprehend and plan their budget in a way that is appropriate. It is also important to determine whether they wish to extend their repayment period and if lenders are willing to accept it or not. If the EMI is too large for you to comfortably repay you be able to choose an alternative loan amount that falls within your comfortable repayment range.

3. Safety Standards

Digital lending companies are conscious of issues that concern security, and are constantly working on finding solutions. They are finding ways to deal with the problem and earn the trust of their clients. They have developed the Payment Card Industry Data Security Standard (PCI DSS) improves the the global settings for payment accounts. The measures will improve the relationships between digital lenders and its customers.

4. Check the fine print

Before you click ‘I agree at each checkbox be sure to go through these terms and conditions thoroughly. This will avoid any confusion that may be a problem in the future.

The customer must be informed in advance of the amount of interest to be paid when they pay, the due date for repayment as well as the specific penalties for late payments and any charges from third parties when applicable. In addition, they must be aware of charges for prepayment or foreclosure as well as loan cancellation fees and charges for unpaid EMIs and various legal charges.

Most likely the most frequent and yet the most important suggestion is to go through all conditions and terms carefully prior to making a loan online. This will help avoid unexpected surprises (mostly unpleasant) later.

5. Credit scores that are good credit scores

A credit score indicates your credibility as a loan-seeker. The lenders learn about your credit background through credit score. It is only after that are they prepared to loan you money. This way, they know the amount of risk that is involved.

A good credit score will help in obtaining a good credit with a low interest rate, but a weak one can lead to a high interest rate for loans. Therefore, it is best to keep a good credit score. This can be achieved by regularly checking your credit score and making sure that it isn’t below a specific level, by making sure to pay EMIs promptly and clearing credit card bills each month.

Fintech companies have been using innovative technologies for a long period of. A fintech company such as EarlySalary has a product line that will help you begin your life with your portfolio and invest. It’s convenient to use, paperless and easy. They offer new methods to ease the process of digital lending and make customers’ lives easier.