Faced with the cash flow crisis? Here’s how to get short-term loans
Written by Rohit Garg
The end of the year-end holidays is always marked by falling wages due to various expenses for purchases and gifts. This could prove to be problematic if one encounters an untoward or emergency expense. While applying for a credit card is an option, it can sometimes be a tedious process.
Especially for the underserved sections of our society, which are often unable to access loans and financial products due to lack of capital and banking information. In such a case, personalized microloans are more suitable for low cost entities because they are easier to use.
Current operating models of banks and financial companies often fail to cover the various underbanked segments like small vendors, street vendors, etc. which together form the broad microenterprise domain of the SME ecosystem. A number of dedicated microfinance companies are leveraging AI and data science to design cutting-edge lending algorithms. These algorithms help to accurately assess the credit history of individuals and grant immediate loans. People who were previously denied access to banking and financial services can now effortlessly acquire these monetary benefits. All you need is a smartphone and an Internet connection.
The pioneering concepts of microfinance and microcredit conceived by the Bangladeshi Nobel laureate, economist and founder of Grameen Bank Muhammed Yunus remarkably strengthen the underprivileged layers of society. India, despite being one of the fastest growing economies in the world, still has a large population lacking basic banking and financial services. These short term loan facilities are perfect for those who aspire to small and medium credit characteristics.
While these services allow small and micro business owners to access loans, insurance and investments that help their businesses grow; Short term loans are also suitable for potential borrowers from the middle and low income client segment who are looking for quick credit services.
They can now seamlessly receive a range of financial services from the comfort and convenience of their home after registering and identifying themselves on a fintech platform app.
There is currently a plethora of personal loan companies operating in the financial ecosystem. Customers who wish to avail credit services should diligently choose their preferred loan company after carefully weighing the pros and cons. Different service providers offer a wide range of financial products and services, and customers should select a product that suits their credit needs.
The rise of digital technology has made applying for a loan a simple and hassle-free process. No longer is availing a loan hampered by paperwork and formalities. Nowadays, it is possible to take out a loan in a few minutes with a minimum of documentation. Customers can access a wide range of credit services without worrying about legal and procedural formalities. The lenient eligibility criteria for instant loans allow easy and efficient access to credit.
People facing a currency crisis after spending lavishly over the holiday season and need an efficient solution for their financial needs can benefit from the easy approval feature of short term loans. Instant loan application can easily help with monetary concerns of people waiting for their next salary because the loan approval process takes very little time. At the same time, the disbursement period is also very short in the case of short-term loans. Users get the money credited within hours of applying for a loan.
If that was not all, these short term instant credit suites also offer very simple and user friendly payment options. Borrowers can make loan repayments through a finance company’s proprietary app in a simple and streamlined way. If a customer is unable to repay the credit for personal reasons, it can also be settled through flexible EMI options.
Obtaining repeat quick loans from finance companies and timely repayment entitles users to improved credit scores which can be helpful in securing larger loans in the future. With enhanced credit credentials, users can access better credit services from lenders within minutes.
That said, instant credit and loan services are more suitable than credit cards for monitoring any emergency spending. With credit cards, the possibility remains that a user’s purchasing power is limited to those that are compatible with the card. This greatly limits a user’s purchasing potential by preventing them from accessing cash. On the other hand, the new age instant loan apps transfer money directly to a customer’s bank account which can be used efficiently anytime, anywhere.
Quick loans are revolutionizing the lending industry with their simplified access, ease of approval, less paperwork and easy repayment capabilities. With an entire segment in India subject to various cash-related issues, obtaining instant loans is emerging as the preferred form of credit service. Not only underserved segments of the population, but even MSMEs and members of the middle and lower segments of the population turn to instant loan applications, rather than credit services and other financial products.
Rohit Garg is co-founder and CEO of Smartcoin. Views are personal
First publication: STI