What Is KYC? 

Financial organizations lending to the public must practice KYC to verify information offered by borrowers during a business loan application. It helps businesses validate who the customers say they are to protect the lender’s interest. They can learn more about the identity and intentions of customers opening accounts by monitoring transaction patterns. Complying with KYC regulations prevents financial terrorism, money laundering, and other schemes.  

Compliance is also how one can tell the difference between secured vs unsecured small business loans. Secured loans are provided by banks and lenders wherein customers must offer collateral in case they default on payment. It can be a vehicle, equipment, or the like. Institutions are more likely to perform strict due diligence to get the information they need from the borrower during the application.  

Unsecured loans are loan products for which borrowers can apply without collateral and only need the customer’s signature. Examples of these loans are online and alternative lending that remain open to individuals who cannot meet standard requirements or don’t have the creditworthiness that banks and conventional lenders need. Alternative lenders become open to management risks because they don’t have the experience of banks and often struggle with KYC. As a result, online lending businesses risk investigations and penalties. 

KYC And AML 

The U.S. Financial Crimes Enforcement Network (FinCEN) requires customers and financial institutions to comply with KYC standards and regulations. It’s an effort to prevent money laundering and other illegal activities. It’s a measure for compliance of both the lenders and borrowers.  

Developing customer relationships and creating a risk profile must be clear to financial institutions. It’s imperative to have benchmarks for detecting potential dangers through suspicious activities. Those in the lending business must have a system of retaining accurate and current customer data and strictly monitor accounts to spot illegal activities. They must report immediately once unlawful activities are detected.   

KYC Implementation 

Financial institutions that don’t comply with KYC standards can face fines, reputation damage, and sanctions. You can be seen as enabling economic terrorism or money laundering.   

The following elements are required for an efficient KYC program:  

1. Customer Identification Program (CIP)  

The CIP was provisioned by the Patriot Act to limit terrorism funding, laundering, and other criminal activity. It’s mandatory for a customer to provide identity details for verification purposes. Customers must provide their names, dates of birth, addresses, and identification numbers.  

The business must then verify the information within a given timeframe. The procedure can include the submission of documents and methods that don’t need paperwork, like comparing customer information with reporting agencies.  

Banks and traditional lenders would ask for requirements from business loan applicants. Here are some of them: 

• Bank statements 
• Business licenses and permits 
• Proof of collateral 
• Personal and business tax returns 
• Employee Identification Number 
• Balance Sheet 
• Commercial Lease copy 
• Legal contracts and agreements 
• Driver’s License 
• Incorporation documents 
• Business insurance plans 
• Payroll Records 
• Business plan
  

2. Customer Due Diligence (CDD) 

Establishments use CDD to gather and assess vital information about the customer. The process enables them to determine the potential risks attached to the borrower. They utilize various databases to compare the information. These can include the following: 

• Third-party database 
• Public data sources such as company listings 
• Territory or government lists of sanctions 
• Customers who must provide specific information to deal with lenders 

Customer due diligence is a part of KYC standards and may vary from one country to another. 

3. Continuous Monitoring 

It’s essential to monitor each customer continuously. Institutions must have measures in place to track customers. Included in the continuous tracking of activities are financial transactions and accounts. Tracking is based on risk benchmarks on the borrower’s risk profile. Lenders may track the following: 

• People included in the list of sanctions 
• Activity spikes 
• Activities occurring past the border 
• Mentions in the media 

A Suspicious Activity Report may be filed if there are unusual activities on the borrower’s part. Institutions also use periodic reviews of accounts and related risks through the following:  

• They check if the accounts are updated. 
• If the purpose of the account matches the type and transaction amount 
• If the transaction amounts are appropriate to the risk level 

Lenders use risk-based assessment as the benchmark for monitoring transactions. Banks and traditional lenders must implement KYC to ensure they can’t be used for illegal activities. It’s also to help ensure that they’ll only be releasing funds to legitimate businesses or honest individuals.  

In Conclusion 

Know Your Customer is a process that verifies the information given by customers who want to engage in a financial transaction, like a business loan application. The FinCEN must implement these measures using the customer identification program, customer due diligence, and continuous monitoring of customer accounts and activity. Banks and lenders must first ask for requirements and verify the identity of the loan applicant. At the same time, it helps prevent criminal activity. 

The post KYC For Business Loans: An In-Depth Guide appeared first on FinTech Ranking.

Your business has varying financial needs, and an urgent capital injection like a loan is a strategic way to keep heading toward your goals. Furthermore, a business loan can help you smoothen the cash flow and invest in developing new products. To ensure you get the most out of your borrowed funds, the following is a guide on spending your business loan effectively. Read on!

What’s A Business Loan?

At some point, your company needs financing to stay afloat. A business loan allows you to bring money into the business to back certain expenses and operations. You can obtain such funds from a lender under specified terms and conditions.  Also, you have to pay back the money with some interest.

Business Loan Terms You Should Know

Business loans are complicated; thus, you must know and understand the following key terms you might encounter along the way:

• Cash Flow: This is the net amount of cash that goes in and out of your business. It determines your ability to operate and if a bank can trust you with a loan. A positive cash flow shows that your business earns more than it spends.
• Assets: These refer to things of value that your business owns.
• Collateral: This is an asset your company lists as security to get a loan. Should you default in repaying the loan, the lender can claim possession of the listed collateral.
• Down payment: It pertains to the amount of money your business will contribute to the loan upfront.
• Personal guarantee: You must sign this so a lender can approve your business loan. This agreement shows that you’ve agreed to use your assets and cash flow as collateral.
• Interest rate: It refers to the percentage of the principal loan amount that contributes to the project upfront.
• Repayment schedule: This is the plan you set to repay the loan. 

Familiarizing yourself with these terms will enhance your understanding of effective spending, as outlined below.

How To Ensure You Spend It Properly

You must stay on top of your business administration to ensure practical and sensible use of the business loan. Whether it’s a person-to-person (P2P) or bank loan, you must prevent spending mistakes that aren’t beneficial to the business.

Before you dig into your acquired money, consider the following things:

• Generate a spending plan: Avoid leaving things to chance and make a plan for every coin of your loan. You can only spend your funds effectively if you strictly follow a concrete plan.
• Keep the loan separate: You should separate the loan from the usual business account and transfer it only when necessary. This adds a layer of consideration for all purchases, making it hard to spend impulsively.
• Have a repayment plan: You should always remember that you must pay the loan with interest. Have a plan for this, so you don’t lose the collateral you listed.
• Include the new financing in your business plan: You should accommodate the financial changes in your business plan. It’s advisable to re-analyze your business plan consistently, and additional finance injection is a perfect opportunity to do that.
• Watch the business numbers closely: Closely and consistently check the business expenditure. You can stay in control and have a handle on the loan if you’re vigilant. Make sure every spending aligns with the business’s growth and revenue generation. If necessary, set a rule that the finance team should approve every expenditure.
• Get an expert to advise you: Financial management isn’t in everyone’s skill set. To ensure you know the business expenses to prioritize, consult an expert. They can guide your spending to grow your business effectively.
• Avoid flashy equipment unless it’s essential: It’s common to want top-tier equipment and machines for your business to keep up with trends. However, it’d be best if you resisted this urge unless necessary, and you could see a significant change in output with the investment.
• Don’t spend it all at once: A cash influx can be empowering and exciting for the business. However, ensure you’re disciplined in your spending. Have a plan and a budget. Preferably, spend the cash in bits, taking enough breaks to review your spending and ascertain you’re on track.

With the newfound money in your hands, these tips will ensure you spend each coin efficiently, wisely, and effectively.

Where To Spend The Loan

A loan can help your business upgrade various aspects. You can spend the funds on the following things:

• Everyday business operations, like rent and marketing 
• Machinery and business equipment
• Refinancing business debts
• Launching of new product or service
• Staff hiring and training
• Building a new website
• Stocking inventory

Ensure whatever you spend the loan on adds value to the business.

Conclusion

Businesses have numerous expenditures, but not all are worth spending loan money on. You must focus on things that facilitate the development and expansion of your business. The tips above will ensure you spend sensibly and make wise decisions that’ll lead to a reasonable return on investment (ROI) on the loan.

The post A Guide To Spending Your Business Loan Effectively appeared first on FinTech Ranking.

Floryn, which provides financing for SMEs, said it will use the new funds to strengthen its position as “the most cost-effective alternative to a bank”.

The fintech provides business loans of up to €3m and says it has provided more than  €650m in financing since it was founded in 2016.

Read more: AltFi

The post NatWest invests €65m in Dutch fintech Floryn appeared first on FinTech Ranking.

How does Fintech Lending work?

Fintech lending uses technology to automate the process of underwriting and approving loans. Using things like big data and artificial intelligence, fintech lenders can quickly assess the risk associated with a loan and make a decision accordingly. This allows them to approve and fund loans in a matter of days, which is a huge benefit for business owners who need capital quickly.

The benefits of Fintech Lending

There are several benefits of fintech lending, including: 

• Fast approval and funding times: as mentioned above, one of the most significant benefits of fintech lending is that loans can be approved and funded in a matter of days. This is a huge benefit for business owners who need capital quickly. 
• Easy application process: another benefit of fintech lending is that the application process is typically straightforward. In many cases, you must fill out an online form and provide some basic information about your business. 
• No collateral required: unlike traditional bank loans, fintech loans do not require collateral. This makes them an excellent option for business owners with no assets to put up as collateral. 

The downsides of Fintech Lending

Of course, there are also some downsides to fintech lending, including: 

• Higher interest rates: one downside of fintech lending is that interest rates tend to be higher than traditional bank loans. This is because fintech lenders are taking on more risk by lending money to small businesses. 
• Shorter loan terms: another downside of fintech lending is that loan terms tend to be shorter than traditional bank loans. This means you will have to pay back your loan more quickly than a traditional bank loan. 
• Limited availability: one final downside of fintech lending is that it’s not necessarily available everywhere. There are only a handful of states where fintech lenders operate currently. This means that business owners in other states cannot take advantage of this type of financing. 

When it comes to taking out a loan, there are a variety of different factors that you need to take into account. What is the most straightforward loan to get approval for? What is the best type of loan for your needs? We’ll look at some of the many loans accessible in this article and which ones are simplest to get approved for. Keep reading if you’re new to borrowing or want to switch your existing loan for a better deal.

What are the different types of loans available to consumers?

A loan is a sum of money lent to an individual, organization, or business to be repaid later. The different types of loans available include:

• Fintech loans are typically available in smaller amounts than other types of loans, like a Mississippi title loan, and you can repay them over a period that works for you.
• Credit cards: Also known as revolving credit, these are one of the most popular types of loans. Credit cards offer borrowers a line of credit they can use for various purposes.
• Mortgages: A mortgage is a loan used to purchase a home. Mortgage loans typically have longer repayment terms than other types of loans, and the interest rates are usually lower.
• Auto loans: Auto loans are used to finance the purchase of a new or used vehicle. These loans usually have shorter repayment terms than others and often have higher interest rates.
• Student loans: These are used to finance college or university costs. These loans typically have lower interest rates and longer repayment terms than other types.

Each loan type has its eligibility requirements and repayment terms. For example, most credit cards require applicants to have a good to excellent credit score to be approved. Similarly, personal loans typically have higher interest rates than other types because they are unsecured, and no collateral is required for you to be approved for the loan.

What is the most accessible loan to get approval for?

The answer to this question depends on factors such as your credit score, employment history, and income. That said, a few types of loans are easier to approve than others. For example, online installment loans are often easier to qualify for than traditional bank loans, and Online lenders typically have more lenient eligibility requirements and offer flexible repayment terms.

Online installment loans may be a good option if you’re looking for the most straightforward loan to get approved. These loans are typically available in smaller amounts than other types of loans, and you can repay them over a period that works for you. In addition, online lenders often have quick and easy application processes that can make it easier to get the capital you need when you need it.

Conclusion

Fintech lending is a new and innovative way to get financing for your small business. While some downsides, such as higher interest rates and shorter loan terms, the benefits far outweigh the negatives. Business owners who need capital quickly will find that fintech lending is the perfect solution!

The post All You Need to Know About Fintech Lending and Why It’s so Popular appeared first on FinTech Ranking.

Business loans: what are they?

If you’re looking to start a business, or you’re a business owner that would like to give your company a boost, business loans are the first port of call when it comes to securing additional funds. With access to so many different types of loans that you can use for whatever you like, whether you want to grow your business, employ more staff, or buy premises to work from – extra funds from a lender can help. Because there are many options when it comes to these loans, there are also many different lenders – so you’ll have to do your research to find a loan with the most suitable repayment period, and the most affordable interest rates for you.

What is cryptocurrency?

Cryptocurrency has become more popular over the last decade but how much do you know about it? Crypto is a digital currency that is exchanged through a digital network – it is not a physical currency that you can touch, and it is not governed by a central authority like a bank or government. It works and is supported by a technology called blockchain, which keeps this currency secure and does not allow anyone to tamper with it. Blockchain means that you can’t spend your cryptocurrency twice! Just like money, crypto is referred to as coins or tokens. Some of the most well know are bitcoin, Ethereum and Litecoin – if you are thinking about trading and investing in Crypto, these would be the best place to start, as they are the most popular in an otherwise volatile market.

Crypto loans

So what does crypto have to do with loans and lending? Well, as technology advances and more of us start to use and trade cryptocurrency, Crypto loans may well start to become an essential part of lending. Crypto loans offer a tamper-free way of securing additional funds and can emulate how most traditional loans work. Platforms that offer this form of lending will use crypto as collateral against loans.

Pros of crypto loans

If you think you would like to try a crypto loan in the future, getting to know how a specific platform works will help you to do this. Here are a few pros that you may find when diving into the world of crypto loans.

• Lower interest rates: Compared to traditional loans, crypto loans keep their interest rates under 10%, so they may seem better value than the most traditional type of loan.
• No credit checks: Unlike bank loans, you do not need to prove your credit score to benefit from a crypto loan, so you can still take advantage if you have bad credit.
• Easy to get: if you have collateral for a crypto loan, you’re good to go, no other requirements are necessary.

Cons of crypto loans

Of course, with any type of loan, you need to weigh up the good with the bad so that you can make a sensible decision, and because crypto is such a volatile market, it is even more important that you consider borrowing more carefully. Here are some of the cons to think about:

• Risk Liquidation: The volatility of the crypto market makes it difficult for lenders to make their money back, even if it is secured with collateral. Anything can change at any time with the crypto market.
• Technical issues: Because you will be using a platform to borrow your crypto loan from, it is always possible that it could become compromised if it is not sufficiently secure.This could result in you losing funds.

So, whilst it is possible that loan companies may start giving borrowers the option of using their cryptocurrency as a way of taking out a loan, or to use as collateral, in the short-term a traditional loan is more secure and less volatile than you would find with a crypto loan – but that’s not to say things won’t change in the future.

The post How Business Loans Will Introduce Crypto In The Near Future appeared first on FinTech Ranking.

While online payday loans are an easy and fast way to obtain money, they aren’t the best option for solving serious financial issues. Here are six benefits of getting an online payday loan to solve unexpected money problems.

1. Fast application process

Traditional loans take longer to be processed and approved. On the other hand, e-transfer payday loans take less than a day to have your borrowed money in your account. Remember, these loans are designed for emergencies, so they have a sense of urgency. The time taken to process a payday loan differs from one lender to another, so this is an important aspect you should consider when choosing your lending company. The loan can be instant, within hours or a day.

2. No credit checks

Online payday loans don’t involve credit checks, making them a perfect choice for people with a bad credit score or no credit. You will get the money regardless of your bad credit history if you meet the minimum requirements for pay loan qualification.

3. Safe and secure way to borrow cash

Getting an online payday loan is a safe and secure way to borrow cash. These loans are regulated by the government, so you are sure to get quality service. In addition, since the whole process is done online, you don’t have to worry about giving out your personal details to shady lenders. You can be guaranteed your information is safe when you use an online payday loan provider.

4. You can use the money on anything

Most traditional loans have limitations on how you should use your borrowed money. However, with online payday loans and cash advance Midwest City, your lender has no authority in deciding how the borrowed money is spent, so you have the freedom to use the money the way you want.

5. Easy to qualify

Unlike conventional loans that often have strict requirements, online payday loans have favorable qualification terms. Most loan providers only require you to be at least 18 years, have proof of residence, a monthly income assurance, a driver’s license, and a bank account. You can trust Hard Money Lender San Diego for commercial bridge loans, multifamily loans, single family rental loans. Some lenders may ask for more details regarding your job, but you can access online payday loans for unemployed individuals if you have a business or are on benefits.

6. You can choose repayment terms

When you apply for an online payday loan, the lender will advise you on the loan repayment period options. This loan is aimed only for temporary financing for two weeks to a month, but some lenders allow repayment within three months. Because they are short-term loans, an online payday loan won’t impact your money for a long time, unlike traditional loans.

Endnote

An online payday loan is a great choice if you are looking for an easy and fast way to obtain some extra cash. Payday loans are short-term loans meant for emergencies, and they come with a lot of benefits. However, be sure to choose a legitimate lender with a proven track record in offering genuine services to customers and fair interest rates to enjoy these benefits. 

Photo by Andrea Piacquadio from Pexels

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What Is Cash Flow Finance?

Cash flow is the amount of money that you have coming in and out of your business in a certain period of time. There will be moments when you have an extremely positive cash flow, but there may be times when you slip into a negative one, and you may be worried how you’ll get out of it. This is where cash flow finance comes in and it can really make a difference to your situation. Typically, you’ll be able to apply for a lump sum of money from a reputable lender and use it to boost your cash flow.

How Can I Finance It?

Accessing cash flow finance can be done in a number of ways. You might want to go for a typical loan that allows you to borrow the cash you need all in one go and then you can pay it back each month. Alternatively, you might like to go for something like a credit card or overdraft. These mean you don’t have to borrow large amounts and only spend what you actually need. This helps you keep your debt to a minimum but also provides your cash flow with the boost that it needs. Make sure that you only ever get your finance from reputable lenders, as there are scams that anyone could fall victim too. If you’re ever unsure, don’t do it. You’ll thank yourself in the long run!

The Benefits Of Cashflow Finance

There are many benefits to accessing cash flow finance, but one of the biggest one is enhanced growth. With extra cash available, you’ll be able to supply your business with everything that it needs whenever you need it, making you much more profitable too. You won’t have to turn away orders due to a lack of stock as your cash flow finance will help you replenish what’s needed. Cashflow finance also gives you the opportunity to invest in your employees, helping you to develop their skills even further which will massively improve staff retention and happiness. A good business needs a strong team behind it, so utilising your finance this way is extremely beneficial.

Having a strong cashflow will also mean that you’re prepared for anything life throws at you. No matter how much you try and avoid it, there will come a time when you experience an emergency and having a good cashflow behind you can make all the difference. For example, say you run out of stock of a best selling item and it’s going to be a super busy weekend. Not having it could cost you dearly, but if you’ve got the cashflow behind you, the replenishment of it can easily be achieved.

Things To Take into Consideration

There are some things you need to consider when looking into cashflow finance, and some of them can be detrimental to your business if you don’t think about them carefully. One big thing to consider is how much debt you want to get your business into. While it may be tempting to take out a huge loan, you need to take a step back and think if it’s really worth it. It’s always best to borrow how much you need and no more than that. You also need to think about your team and how they will be impacted by the sudden influx in your cashflow. Having more money to spend may mean an increased workload for them as orders and sales grow. However, if they aren’t trained or equipped to deal with it, then you’ll set yourself up for failure. Make sure that you invest in their training and wellbeing to ensure that they can handle the rapid growth of your business when your cashflow increases. You also need to employ enough staff too. If you don’t, you’ll quickly find out why you should, and your business may suffer unnecessarily. So, while cashflow finance can be a fantastic help, make sure you’re well prepared for the changes it will bring to your business.

Cashflow finance can really make a difference to your business, and sometimes it can be a lifeline. Make sure that whoever you decide to borrow from is reputable and that you understand all of their terms and conditions. Your business will flourish with its new increased cashflow, and you’ll find that growth comes a lot easier to you. With the help of your better cashflow, your business will go from strength to strength and you’ll soon find the success you’ve always dreamed of!

The post A Short Guide on Cash Flow Finance for a Startup appeared first on FinTech Ranking.

BukaTabungan is now available on Google Play Store and will soon be available on the App Store.

Through offering banking access, BukaTabungan also aims to support the business continuity and development of Micro, Small and Medium Enterprises (MSMEs) who make up 97% of Indonesia’s workforce.

Read more: Fintech News Singapore

The post Bukalapak, StanChart Launch Their Digital Banking Service in Indonesia appeared first on FinTech Ranking.

Without a doubt, the greatest invention in banking history is online lending. You can get a loan from fintech lenders with a few taps on your mobile phone, laptop, or tablet.

Wait! Nothing can be as easy as it sounds if you don’t have your paperwork organized.

What do you need to apply for a loan from a fintech lending institution? Find out by reading on.

Have Your Documentation in Order

To get your online loan approved by your fintech, you must have the requisite documents. Perhaps you’re wondering why the lender needs the paperwork?

The required documents in an online application are part of the KYC (Know Your Customer) process. Lenders use them to verify who you are, your location, and what you do for a living. They also want to know your income history, which is essential in determining your ability to pay.

Here are some of the vital documents your lender will need from you.

1.   Proof of Identity Documents

Fintech lenders use proof of identity documents to verify whether you’re a U.S. citizen or permanent resident.

In the U.S., you must be 18 years and above to qualify to sign a legal contract. Up until your 18th birthday, you are a minor and, therefore, can’t enter into a binding contract with a lender.

If you’re employed, the bank will need the following documentation to verify your identity:

• Drivers license
• State-issued identity card
• Military ID
• Passport
• Social security card
• Birth certificate
• Voters card

For companies, the documents may be lengthy because you must provide the registration details such as the memorandum of understanding, articles of association, and directors’ identification documents.

You can have these documents in soft copy so that you can easily upload them every time you apply for a personal loan.

2.   Proof of Income Documents

After submitting the proof of identity documents, your fintech lender will need to verify your income status.

For this, you’ll need to submit the following documents:

• Employers contact information.

• Your online pay stub, which is attached to your paycheck and includes information about your earnings, taxes, and deductions.

• A W-2 report, which is an IRS tax form that reports your annual wages and taxes paid.

• A 1099 form, which is a collection of tax forms that details various amounts received other than employment income.

• Tax returns are reports filed with the IRS or respective state collection agencies.

• Bank records. Most lenders will demand six months’ statements to verify a consistent income.

You can download your tax returns in your payroll database or ask your human resources for assistance if you get stuck.

You must submit your 1099 form alongside income tax returns if you’re self-employed.

Before submitting bank statements, ensure they have been certified by your financial institutions.

3.   Proof Address Documents

Your fintech lender will ask for proof of address documents to verify your location and determine whether you have a stable lifestyle.

You’ll need the following documents:

• Utility bill
• Mortgage statements
• Proof of homeowners insurance
• Proof of lease insurance
• Proof of rental insurance
• Property tax receipts
• Lease or rental agreement
• Voters registration card
• Bank or credit card statements

You can get confirmation of a change of address by contacting the U.S. postal service or by going to your local post office in person.

4.   Income Records

If you have a business, you’ll need to provide financial records, such as accounts receivables and payables, as well as revenue statements.

If you have rental income, provide real estate statements, including a record of your tenants and copies of property titles.

Besides that, you’ll need to provide a monthly expenditure statement so the lender can estimate your cost commitment. It also helps in determining your ability to pay your monthly installment.

Know Your Credit Score

After initiating the loan application process, your fintech lender will run a credit report to assess your credit score and evaluate your credit history.

You might not be eligible for any loan product if you have no credit history because lenders analyze your past borrowing history to determine your creditworthiness.

The FIFO or Vantage score is used by the majority of lenders in the United States. Although there’s little difference between the two, lenders will accept your application if your credit score is good. If the score is bad, they may postpone or decline.

The table below illustrates the various elements considered while calculating credit scores.

From the table, the credit history constitutes a significant aspect of your credit score. Therefore, it’s what your lender will mostly be interested in while approving your loan application.

Credit reports are issued by the leading credit reporting agencies Equifax, Experian, and TransUnion. 

Under federal law, you’re entitled to a free credit report from each of the three credit reporting agencies annually. Visit Annual Credit Report to get a free report mailed to you or sent to your postal office address.

Depending on the reporting agency, the scores may range from 300 to 900; however, there’s no difference in the categorization.

Here’s a quick rundown of what to expect from your Experian credit report.

If your credit score is too poor, you can put your loan application on hold while you work to raise it.

Here’s how you can raise your credit score.

• Consolidate multiple debts and remain with one with an easy-to-manage installment
• Avoid having many open accounts, as these may attract fees or charges
• Pay your utility bills on time
• Have only one credit card
• Follow the 30% credit rule that enables you to have a low credit card balance.

Can you get an online loan with bad credit? Certainly, your Fintech  lender will most likely reject your application if you have bad credit.

But there are some instances where they may proceed with the application if you fulfill certain conditions:

• Have a co-signer or guarantor with a good credit record. However, it’s important to keep in mind that if you default on your current loan, your guarantor’s credit score will be adversely impacted.

• Provide security or collateral such as a property or motor vehicle title to support your application.

Nonetheless, the lender may offer a higher interest rate and lower repayment period even after fulfilling the above conditions.

State Your Loan Purpose

Fintech lenders may not be concerned with how you intend to use the money advanced, mainly if it’s a payday or emergency loan.

However, they may require this information to develop products personalized to their client’s demands.

Also, products such as vehicle or mortgage loans require the purposes to be clearly described for the bank to compute the Loan-to-Value(LTV) ratio, which is an assessment of the owner’s contribution to the facility

Conclusion

The discussion shows that the loan appraisal process can be lengthy and complicated if you lack essential documentation. Before you apply for loans online from fintech lending institutions, ensure you have the paperwork ready, and most importantly, follow the tips above for a hassle-free process.

Image by StartupStockPhotos from Pixabay

The post What You Need To Know When Applying For A Loan From Fintech Lending Institutions appeared first on FinTech Ranking.

Having launched as a bank and captured one-third of its bank users (1.9 million) earlier this year, the financial super app is looking to continue its success in the Irish market.

The ‘responsible’ BNPL product, Pay Later, will be rolled out in Poland and Romania later this year, with an eye to further expansion across Europe from the end of 2022 onwards.

Read more: AltFi

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