In today’s era of digitalization, instant loan disbursements have become the new norm. Fintech brands have seen significant growth over the past few years, especially during the pandemic when people have adapted to digital monetary transactions faster than ever. In addition, more and more people have trained and taken out loans from banks and NBFCs for one or another reason. The best part about online loans is that there is a vast plethora of options available and the borrower can easily assess the interest rates offered by different fintech companies.

Another major advantage of obtaining loans online is that the process is better streamlined with less paperwork and offers the convenience of home service. Moreover, you can choose from a wide category of loans such as personal loans, medical loans, travel loans, home loans, car loans and much more.

Although the process of obtaining a loan has been made digital and simplified, it is also important to know some important guidelines so that you can get the maximum benefit from your loan provider.

Make sure the Fintech platform is genuine
A digital lending platform can take many forms. For example, it could be an independent lending platform registered as an NBFC, a bank, or an organization in partnership with a bank or an NBFC. The key here is to verify and verify that the lending entity is registered as an NBFC. You can choose to get a loan from a bank, NBFC or a partner entity of either. These are safe and secure options for a borrower.

If you come across a lending platform that does not display its NBFC license number on its website, it is best to stay away from such sites. No matter how attractive the loan offers or the interest rate, they are not safe options for you. Also, make sure your bank/NBFC is registered with the central bank or state authorities, as they are the ones that grant the license to offer digital loans to these entities. If you cannot find an authentic platform based on these two very crucial criteria, the best thing is to avoid sharing your personal information and bank details with them online.

Loan approval without KYC
With Aadhaar introduced in the country, we have all been bound with an identity card which functions as an authentic document of our identity. Therefore, all credible lending platforms verify your Aadhaar information and perform online KYC to ensure that transparency is maintained at both ends. Therefore, if any digital platform offers to give you a loan without KYC, it is inappropriate and there are chances that it is a scam that can lead to identity theft or financial fraud resulting in huge losses. It is best to strictly avoid platforms that do not perform KYC before disbursing the loan.

Avoid hidden fees
Some digital lending platforms levy unnecessary hidden fees on your loan, such as late submission fees for late payment of installments. Some use a manipulative methodology with interest fluctuations that are completely unethical and create an unnecessary burden on the borrower. Late submission fees are a popular scam, where people end up paying 2-3% more for no reason. Therefore, be careful when taking out loans and read the documents carefully.

Read the documents carefully
As already suggested, it is very important to read the offer documents which include the duration of the plan, the interest rates and the terms and conditions of your loan policy. It’s the best way to stay safe from fraud, unnecessary hassle and fees