Does Credit Score Matter When Applying For A Loan Over A Fintech App?

Is there a financial emergency? Do you need an instant loan? Thinking of availing a Fintech app? And the big question hovering in your mind is, ‘Does my credit score matter?’ A short and immediate answer is ‘yes, it does.’ However, there is still much more to learn. Let us simplify the matter.

First, understand what a credit score means. Your credit score is the number that determines how well you manage your finances. In short, it explains your money habits. The range is generally between 300 and 900. The higher you score, the better your chances of getting the loan amount you applied for. One of the most popular companies in India that creates this score is CIBIL.

Why must you prefer a Financial company over a traditional bank?

To date, well-established banks in India have been strict about permitting loans. Approval becomes difficult if your credit score is low. However, some new finance apps, such as Rupee112, have transformed the scenario using advanced technology. They consider factors other than your credit or CIBIL score. Naturally, your required money gets approved easily with these apps.

Fintech Apps And Your CIBIL Score:

Score of 750+: 

It is considered a good number. The benefits that you will get are,

• Quick approval of your loan

• Much lower interest rates

• Substantial loan amount

• More beneficial terms and conditions

Score of 650-750: 

Though this is an average range, you will still get the amount. The conditions you will have to adjust to are,

• A moderate interest rate

• Approval of a small amount

• Needing to submit additional documents

Score below 650: 

Although this is not a good number, finance companies will provide you with a loan. Unlike the banks, they will not reject your application, but,

• Assess you based on some other data

• Offer a much smaller amount

• Charge higher interest rates

• Ask for a guarantor

No credit score at all: 

Maybe you are a newbie. So, you lack numbers. Thus, these financial organizations will still not cancel your application right away. They will have a glance at your salary slip, job security, and spending habits.

How To Increase Your Chances Of Approval?

However, even though these Fintech companies have made the money lending process smooth, there is a fear of cancellation. So, here are some tips to increase your approval possibilities.

• Always remember to keep your documents ready while applying, especially PAN, Aadhaar, bank statements, and salary slips.

• Try to maintain a considerable bank balance that reflects your stable income and savings.

• Make sure you pay your bills on time. It will improve your credit score.

• Use the same phone number for all your banks so that the apps can track your financial patterns.

• Fill in all your details in the app honestly.

Conclusion: 

It should be clear by now that a credit score matters in the case of a loan, but it is not everything. In this digital era, the financial industry is also undergoing a revolution with the advent of Fintech apps. However, do not forget to borrow responsibly. First, gauge your capacity and only then apply for the loan. Be a wise borrower of the modern era!