The Do's And Don'ts For Customers Before Availing Online Credit
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As our tech has advanced, the way we conduct banking transactions has completely transformed. The fintech sector is one of the fastest-growing sectors, especially in India. In fact, the fintech sector in India was valued at INR 1,920.16 billion in 2019 and is in fact projected to grow to INR 6,207.41 billion by 2025 despite the global markets undergoing a huge economic set back due to the COVID-19 Pandemic.
A step towards the solution or a bigger problem?
With the unprecedented rate of advancement in the fintech sector, a huge part of the Indian population now has easy and instant access to various forms of credit while comfortably sitting within the confines of their homes. However, the easy availability of online credit has also resulted in several incidental challenges. For instance, the increased incidents of cybercrimes, online frauds, identity theft, etc., have become rampant with the increase in use of online credit facilities.
In addition to this, financial planning has arguably gone haywire simply because people have a fall-back option for easy access to instant cash. Many consumers now have habits like impulse buys, unplanned major expenditures, among others. Even though instant online credit may solve the problems in the short run, it can potentially wreak havoc on one’s financial health over a period of time.
With the expansion of the fintech sector, several online credit providers have cropped up on the block. Not all of them may be genuine and may easily defraud unsuspecting customers of their money.
In this context, it can be said that while gone are those days where you had to file hundreds of applications and follow a long, tedious process for availing credit, this convenience of the online credit facility may come at a cost.
Things to keep in mind
Here are a few tips that you can remember before you think about getting online credit.
Make sure to choose a reliable and genuine online credit provider. Since it is difficult to evaluate a brand’s authenticity by simply looking at the website or the app, try visiting review websites where people share their brand experiences, good or bad. You can also take the conventional route and use an online credit provider that your friends and family have already used and had a good experience with.
Do thorough market research before zeroing in on one online credit provider. Since this online credit market is highly competitive and very dynamic, make sure to go through multiple options and pick the one which suits your needs the best. By doing this, you not only get the best rate of interest but also may get the opportunity to work out an online credit plan customized according to your needs and wishes.
Clearly understand your financial needs. Evaluate the nature of your need for credit and decide which form of credit may be best suited for it. For instance, you can go for a credit line or an instant personal loan bearing a low rate of interest.
Understand your own financial position well before opting for any form of credit. Do not resort to taking credit at the drop of a hat and ensure it is economically feasible for you in the long run. You can use tools such as EMI calculators available online to make a more informed decision and to make a financially sound plan in sync with your income stream.
There are several aggregator websites that can offer online credit options from multiple organizations, all on one platform. Additionally, they occasionally offer special incentives, offers, or even extra discounts on various credit options. You can try using them to save time and some extra money.
Do not rush into the decision of availing online credit on impulse buys, which can be deferred. This is often true when planning a luxurious holiday or even buying an over-the-top car. You can always plan them in a way where you can fund it through your savings at least partially.
Make sure to make timely repayment of any credit you have taken. Not only will mounting debt crush your financial condition, but it will also impair your future credit opportunities by adversely impacting your credit score.
There are several hidden charges and fees levied by the online credit providers. Make sure to factor those in, while evaluating the feasibility of the online credit.
Make sure to thoroughly go through the fine print of the borrower agreements. Terms and conditions imposed by different organizations may vary, so make sure to analyze them well and know what you are getting yourself into.
While doing any online transaction in general, and taking online credit in specific, make sure that you follow all security protocols and do not end up becoming a victim of online fraud or identity theft. Use a secured network, a personal laptop, or your phone and make sure not to visit any suspicious sites which may end up compromising your digital profile.
While these things can certainly be a guiding light to make your online credit experience a better one, they are not completely exhaustive. As they say, there is no replacement for common sense and general prudence. Make sure that you factor in all the necessary precautions while you take online credit to fulfil all your needs, however big or small.