The banking and financial services industry has come a long way in offering loans and other financial products. Unlike traditional loan processes that used to take weeks or months to complete, the digitization of the financial industry has made things much easier. There are hundreds of banks and non-banking financial companies offering personal loans today. Individuals can apply for loans anytime and anywhere, no matter how small or big loan they are looking for.
Apart from the emergence of digital loan apps, there are various other trends that are shaping the future of online loan applications. Let us discuss some of the most important ones in this blog:
1. Digital Loan Platforms
With a continuous rise in the usage of the internet and smartphones, the number of online loan applications is also increasing. People no longer prefer visiting banks and standing in long queues to submit their loan applications.
Various new digital loan platforms are emerging, making the entire lending process much easier and accessible for every individual. Online loan apps and websites have gained significant popularity in recent years. As per a report, over two-thirds of people applied for loans either fully or partially online in the last two years.
Online loan platforms like FatakPay use advanced technologies to determine the creditworthiness of individuals and offer them loans accordingly. For borrowers, the entire process has been streamlined, providing them with the flexibility to apply for loans anywhere and at any time.
2. Embedded Financing Options
The best thing about online personal loans today is that they come with financing options. Lenders these days allow easy EMI conversion. Borrowers can easily select the EMI tenure, monthly installment amount, etc, as per their repayment capacity. You don’t have to look for financing services separately. It is not just true for personal loans but also for financial companies offering BNPL (Buy Now Pay Later) options.
If you want to purchase a product on EMIs, you can easily select the EMI option while checking out. Various online lenders have partnered with different e-commerce platforms to give customers the ‘Buy Now Pay Later’ option. This integration of financial services into other products or services is another innovative trend in the digital loan industry.
3. Spend Based Lending
The concept of spend-based lending has also become highly popular in recent decades. Individuals now have more freedom to repay loans based on their purpose of borrowing funds. For example, those who take loans to spend on their business may get an option to repay on the basis of revenue generated from that business. With this, borrowers get higher flexibility as they are allowed to repay the advance Salary loan based on where they have used the borrowed funds.
Apart from this, the loan apps offering monthly credit lines are another example of spend-based lending. Borrowers can get a fixed monthly credit limit that they are free to use as per their needs. FatakPay is one of the perfect examples of online loan apps that also offer a monthly credit limit. Users may or may not use this monthly credit based on their requirements. The best thing about such monthly credit lines is that no interest is chargeable if repayments are done timely.
4. Personalized Experiences
Banks and NBFCs (Non-Banking Financial Institutions) are now using advanced technologies like data analytics and machine learning to understand borrowers’ individual needs and offer loans accordingly. Lenders can analyze users’ spending habits, credit history, income, and other factors to decide on the most suitable loan options for them.
More than 70% of banking institutions are now investing in offering personalized experiences to users. The same goes for NBFCs like FatakPay as well. These lenders properly analyze borrower’s needs, preferences, and goals, before offering a loan or credit line.
5. Automation and Efficiency
With the evolution of modern technologies like AI and Machine Learning, automation has become a new trend in the financial sector as well. Be it decision-making, loan approval, disbursal, or anything else, automation has made lending processes much faster for banks and financial institutions.
They can use AI algorithms to analyze creditworthiness and verify all the information instead of doing it manually. It saves a lot of their time and effort. This further leads to improved efficiency and reduced human error in the lending process.
Even borrowers can benefit from automation as they get the option to automate repayments. This eliminates the hassle of setting repayment reminders and getting a late fee penalty on missing payments.
Bottom Line
The increasing popularity of online loan apps, personalized experiences, automation with AI, etc, are some of the emerging trends in the financial services industry. The way borrowers apply for loans, as well as the way lenders analyze their applications, has changed to a great extent. The processes are much faster and more efficient today. Moreover, borrowers have a wider range of options to choose from.
The top personal loan apps like FatakPay not only offer loans but also provide monthly credit limits to users, which they can utilize as per their needs. Therefore, there’s nothing wrong in saying that borrowers as well as lenders who are aware of these emerging trends can make the most out of the online loans.
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