Startups Helping People Around India With Payday Loans
Unsecured payday loans that provide people with quick cash are becoming more valuable in India than ever before. This especially works for those who have dealt with sudden financial emergencies. Whether it entails an unexpected medical bill or car repair costs, such loans are being provided as solutions to many short term financial restraints.
The loans are being marketed to those who do not have proper funds and need money. The loans are unsecured and provided quickly. It may take about twenty-four hours for the money to get to one’s account after it is applied for and approved as well.
The most noteworthy part of payday loans is that they are becoming increasingly accessible in India. There are more startups than ever before offering such loans. These include many that have formed within the past year alone.
Keys About the Loan
Such payday loans are designed with a series of points:
- The application process for a loan is typically automated. It requires the applicant to enter information on one’s bank account and how much is needed.
- The process of being approved is rather fast. It often takes about ten minutes for an applicant to be approved. It can take up to twenty-four hours to get funds into one’s account depending on the bank that funds are moving out to.
- Loans are short-term and last for about five to thirty days. The applicant can choose how long the term can be. This may be chosen based on one’s next pay date and that person’s ability to pay.
- The money is also provided in one’s bank account. A salary slip is also needed to prove that regular money is going into one’s bank account. PAN card details may also be required. The key is for a person to repay the value of the loan through one’s account the next time that person is paid.
- Interest rates are also exceptionally low on these payday loans. Depending on where one goes for getting them, such loans may be available with a 1 percent interest rate.
A Growing Market
The market for payday loans has been expanding in size over the years. The market in India is worth around Rs. 70,000 crore and could increase by Rs. 10,000 crore or more before the end of the year. This comes as there are more startups offering payday loans than ever before.
There are 84 startups in the payday loan industry. Around thirty of them were formed in the past calendar year. Many of them are fully funded to serve customers. They also use disruptive technology to find potential clients and to keep their costs of operation down.
Many new names in the field have acquired NBFC licenses through the Reserve Bank. This allows these organizations to become legitimate and to be supportive of more functions for helping people.
The money aspect of such loans is noteworthy:
- The values of the loans that these organizations offer are varied. Some places offer loans of Rs. 5,000 but they can also get high-value loans at Rs. 50,000.
- This is being targeted to people who earn from Rs. 20,000 to 35,000 a month. The market may expand in the future as those who earn Rs. 10,000 to 20,000 a month have been asking about these loans as well.
- Some longer-term loans that are good for 90 days may entail more money. Some lenders will offer these longer loans at values of up to Rs. 1 lakh or about 40 percent of one’s salary. Proper financial documentation is needed before a loan can be given out at this point.
The demonetization process has helped many of these firms with getting more payday loans out to a larger number of people. As many people struggled with cash limitations, it was easier for people to go after payday loans. Many payday loan providers have stated that the demonetization process has caused more people to ask about payday loans than ever before.
What About Reviews?
Reviews of clients who want to find payday loans have been rather in-depth. Typically, a person’s credit score, bank accounts and account information are often used to determine if someone can get a loan. Information on one’s application may also be reviewed to determine if that person is actually the one asking for the loan. Some manual support may be required for those whose applications are suspicious or those who have less than perfect income statements or credit ratings.
Reviews For Rates
The flat interest rate of such loans has been a concern in that it could lead people into debt like what payday loans often do for those in the United States and United Kingdom. Add regulation may be required to monitor how interest rates are changing in the loan industry. This is to potentially provide proper loans at rates that people can actually afford to pay off. This also prevents predatory lending from occurring in many instances.