Financial technology, or fintech, is a new-age technology designed to improve financial services.

A businessman using fintech to avail of a loan for new machinery

How Technology is Transforming the Loan Market in India

Q: How has fintech transformed the Indian loan market?

Financial tech has improved the application process, lender comparison, loan calculation, verification and approvals, accessibility, and convenience of loans.

Q: What is the difference between fintech companies and banks?

Fintech companies leverage financial tech to improve and streamline financial processes. Banks are traditional brick-and-mortar or digital establishments offering regulatory financial services.

Team PaisaSimple • July 13, 2024

Technological advancements in finance have made it accessible to many. Financial institutions have embraced fintech to automate and improve financial services for their customers. Fintech companies have transformed the Indian loan market, and we couldn’t be happier.

Financial technology, or fintech, is an advanced technology developed to elevate the financial services market. This technology is accessible on smartphones and computers, streamlining borrowing and investing.

In the wake of the Covid-19 pandemic, disrupted job market, and rising inflation, loans have become highly sought after to meet expenses. And what if there were lending institutions leveraging fintech to make loan approvals and disbursements faster? That’s where fintech companies have gained traction and transformed the Indian loan market.

Financial tech has benefitted borrowers and lenders. Borrowers receive loans with reduced paperwork and instant disbursements. Lenders enjoy low operating costs, improved market reach and risk assessment, and higher revenue.

Let’s dive deeper into how technology has transformed how we borrow loans.

Improved application process

Fintech has made the application process online and hassle-free. You don’t need to physically visit a lending institution to discuss interest rates and terms of the loan repayment—the entire process can be completed at home. Even processes like KYC approvals have gone online. You simply need to upload the requisite documents, and you’re all set.

Effortless lender comparison

You have many options on the loan market. Financial technology helps you compare lenders. You can compare loan rates, loan amount, repayment tenure, and eligibility criteria by lending institutions and choose the option that suits you best.

Online calculators

Online calculators are incredible resources to help determine your monthly EMI amount. You can use these calculators to find out if you are in a position to take out a loan, considering your financial commitments. These calculators help you understand how long or short your repayment period could be to accommodate an EMI amount. This makes the decision-making process easier.

Quick verification and approvals

Since the application process is online, you must upload the required documents onto the lender’s website. Fintech companies use advanced finance AI and analytics to scan and verify your documents. The lender can also access your credit score and history to ascertain your creditworthiness. Financial technology also enables risk assessment by analysing your credit profile. This way, your loan verification and approval are quick.

Better accessibility

Fintech companies have made themselves accessible to borrowers from tier 2, 3, and 4 towns. This accessibility equals better market reach and revenue for lenders. Moreover, it generates trust and customer loyalty.

Conclusion

Fintech is transforming the loan market, making loans accessible and convenient. By harnessing the power of finance AI, machine learning, and automation, the entire process—application to disbursal—is streamlined.

Financial tech has allowed borrowers to enjoy an array of loan options tailored to their needs. By being transparent, quick, secure, and accessible, fintech companies have transformed how we borrow into an efficient and convenient model.