Know about Digital Lending
2022-08-17
18 min read
Digital lending allows borrowers to apply for personal or business loan products from any internet-enabled device, wherever they are. Through digital lending, fintech companies, NBFCs and banks provide credit to consumers through digital means. The entire process will be digital.
Digital Lending Growth: According to media reports, the digital lending market is expected to grow well from $ 100 billion in 2019 to well over $ 350 billion in 2023. India also had the highest FinTech adoption rate of 87% in 2020. Digital lending has emerged as an effective alternative to traditional lending (through financial institutions) for those unfamiliar with credit and those with inadequate financial system services.
What are the main benefits of digital lending?
Better loan payment process, A simple process for getting applicant details, Zero Paper Works
NBFC Meaning: A non-bank financial institution (NBFI) or non-bank financial institution (NBFC) is a financial institution that does not have a full banking license or is not regulated by national or international banking regulators. NBFC enables bank-related financial services such as investment, risk pooling, contractual savings and market brokerage.
Types of NBFC are Wealth finance company, Loan company, Mortgage guarantee company, Investment company, Core investment company, Infrastructure finance company, Microfinance company, Home Finance Company .
Online loans are treated like any other loan you borrow from a bank or NBFC. The same rules apply when you default to online loans. Defaults on payments can usually adversely affect future borrowing.
Safeguards for Borrowers:
Most NBFC loans are not secure. An unsecured loan is a loan that is made solely on the creditworthiness of the borrower, without collateral in the event of default or non-payment of fees. Unsecured loans, also known as personal loans, are usually offered to borrowers with a high credit rating. Credit Information Bureau (India) Limited (CIBIL) is the most popular of the four credit bureaus licensed by the Reserve Bank of India. There are three other companies that are approved by the RBI as credit bureaus. They are Experian, Equifax and Highmark.
Payment delays or omissions of less than 90 days are considered a minor default. As a result, the CIBIL score is permanently affected, but temporarily affected. However, if you do not pay after 90 days, your account will fall into the NPA (bad assets) category. You granted access to your contacts when you borrowed them, so you can access your contact list. Therefore, your personal data is not protected. The loan period is 30 days or more. Loans less than 30 days violate RBI rules and regulations. Always ask for a loan agreement and check the status of NBFC on the official RBI website. They have the right to send legal notices, but not to harass them via phone, SMS, Whatsaaps, etc. In most cases, they do not send legal notices. If you do not repay the amount you borrowed after a period of time, the lender will report your loan account as a bad asset (NPA) to the credit bureau. This has a big impact on your credit score and will also lower your credit score. 420 I.P.C cannot be put in the case The injured party can file a dispute with RBI and file a complaint against the lender in Cybercell. Customer must report unauthorized application to RBI RBI also advises consumers not to share copies of KYC documents with unidentified individuals and unidentified / unapproved applications. If an individual encounters such a request, the details of the request and the bank account information associated with the request must be reported to the appropriate law enforcement agency. You also have the option to report online by filing a complaint online from the SACHET portal. completed When you borrow from an organization, you are responsible for paying it back. Before you get a loan from a digital platform, you need to carefully review the details of the lender. India's digital lending is the solution to all of the above problems and is a new era of lending. Fintech companies have combined current technology financial services to make it easier for lenders and borrowers to withdraw and lend money. The FinTech outlook in India has spawned several groundbreaking initiatives and developed innovative models to address its long-standing financial challenges. The value (total) of India's digital lending business is projected to exceed $ 1 trillion by 2023, of which consumer lending has become an integral part. Due to limited credit availability and huge credit demand, there is plenty of opportunity space for digital lenders. The Indian Lenders Association is working hard to promote the concept of digital lending in India and ensure a secure framework for it to work. We promote digital loans in India and provide as much support as possible for safe use. We will make it a part of our daily lifestyle according to the trends. Digital lending and paperless personal loans continue to evolve to support many white-collar and self-employed people.
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