How technology is transforming the digital lending landscape? – Guide

The financial sector is experiencing rapid transformation due to the COVID-19 outbreak and rapid technology adoption. In particular, technological advances are driving a shift in how lenders operate. For example, millennials are increasingly using smartphones to get credit, which is changing the way lenders operate. Additionally, increasing internet penetration and the adoption of smartphone devices are attracting traditional and new borrowers to digital lending solutions. According to a survey, around 40% of millennial-led borrowers are willing to switch to online mode instead of offline channels when getting credit. This shift is likely contributing to continued growth in the financial sector.

Digital tools are being used to increase the adoption of digital lending in India. The traditional lending market has been a bottleneck for the growth of many companies and individuals, and customer pain points such as a tedious payment process, complex eligibility criteria, and clear credit history have led to digital lending startups. These startups are harnessing the potential of technology to fill the gaps where banks and NBFCs are making the lending process inaccessible to customers. ..

How technology drives online lending

Online loan is more efficient

Lending platforms that offer online loans are available 24/7, which is perfect for small businesses, individual entrepreneurs, and individuals in general. These platforms are able to analyze a lot of data in a snap, which makes them very efficient. ..

Online lending platforms are data-driven, which means that they can get creditworthy borrowers because they have access to more data like remittance data, accounting records, social media analytics, online sales totals and more. In addition, these platforms have fairer terms for a loan and are not limited to just a credit score.

The online loan is economical

Thanks to the advent of Fintech, many entrepreneurs and individuals are now able to reduce their costs and save a lot of time that they would normally spend in a bank. The traditional lending model is expensive, which is why more and more people are opting to borrow money online. Different banks and private loan brokers have different fees which can be very high for some customers and they all take some time to review the documents. ..

Lenders are using more up-to-date data to assess whether someone is eligible for a loan or not. This is good news for entrepreneurs, as it means they can reduce costs and make their businesses more accessible to more people. ..

Fintech makes online lending platforms more objective

A land-based lender typically looks at creditworthiness in order to grant a loan. If a customer’s credit score is good, they will be granted the loan. If not, the lender may come to a different conclusion. Online lenders rely more on up-to-date data, so this can make an objective decision on whether or not someone is eligible for a loan.

Final note

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