Everyone has seen the “Up to 50% Off” end-of-season discount banners displayed outside malls. When a person walks in, they realize that most of the items are discounted but not as high as the one displayed. Invariably, the ones they really like are either cheap or no discounts.
For retail loans, lenders advertise loans based on “starting rates”, some attractive rates with an asterisk “T&C apply”. Some key questions the customer faces are:
- What rate will apply to me?
- Am I eligible for the loan?
- What are the other terms and conditions?
- Will I be able to easily repay or transfer the loan?
This is exactly where MyLoanCare.in comes in. Active portfolio management is a concept that most Indian investors can relate to, but the same cannot be said of borrowers when it comes to loan management. Today, IMEs account for one-third to two-thirds of the average household’s monthly expenses, making “active loan management” a must, especially when there are hundreds of “advertised” loan offers. to choose from. Loan management begins actively before taking out a loan and continues even after taking out a loan. The process begins with researching and comparing loan offers from several banks on interest rates and all loan terms.
“Applicable” vs “announced” rate
MyLoanCare allows loans to be compared based on the “applicable interest rate” as opposed to the advertised rate.
This online marketplace constantly searches for loan offers from all the major lenders in the market and feeds the detailed rates and terms into their database behind their algorithms. When someone verifies a loan offer with them, the organization tells the borrower the “applicable” rate, which is the rate at which the borrower is likely to be eligible for the loan instead of the “advertised” rate. To put this in perspective, a bank advertising real estate loans from 6.65% may also charge rates of up to 11%. Likewise, a personal loan provider offering the lowest rate of 10.50% may also charge 24% on the loan depending on various factors such as client’s income, age, loan amount, duration. loan, credit rating, existing obligations, employer category, job stability and many more. more of these factors. In the case of home loan, factors such as type of property, transaction, stage of construction, size, and other real estate variables also determine interest rates.
Advertisements and news portals, or even bank websites, rarely offer such detailed rate charts or comparisons instead of focusing only on the lowest offered rate.
What are the eligibility criteria?
Each lender has their own eligibility criteria and specifies several parameters, including demographics, credit profile, income, and ownership (in the case of home loans). Even if a lender is in fact offering a loan at the advertised rate, what is the assurance that as a borrower they are actually eligible for a loan from that bank or lender? He / she may not be eligible for a loan from the lender who offers the lowest rate but ends up applying for it. Eventually, the application is rejected, leaving them little time to apply elsewhere.
Then again, MyLoanCare systems have captured the science of whether a person meets the eligibility criteria of one or more lenders. So when they share their profile with MyLoanCare.in, the system not only gives them the options, it filters out the ones where they are unlikely to be eligible and shows them the chances of their loan approval. This helps the borrower decide which lender to apply with.
“T&C Apply” decoding
Also, the choice of loan should be based on the interest rate and fees such as processing fees, lock-in period before prepayment of a loan, foreclosure fees, and other associated fees. Clients have to make several decisions such as fixed rate vs variable rate, PLR vs RLLR, EMI vs bullet repayment option, to avail of overdraft facility or not, optimal loan term, to have a co-applicant or not . The list of decision points is long, which can be confusing for an ordinary borrower. No bank can ever give the borrower the handholding necessary to help them make the most favorable loan decision for obvious business reasons. This is where a market like MyLoanCare.in offers immense value to potential and existing borrowers.
Keep “Exit option” open
Contrary to popular belief, loan management does not end with obtaining a loan by the borrower, but continues to be valid as a concept for existing borrowers. There is no reason for a borrower to get stuck with their existing loan when there are enough choices available to optimize their interest costs over the life of the loan. Borrowers should keep their option to exit the loan open either by prepayment or loan transfer to a new lender to obtain a low rate or top-up loan. Therefore, there are additional parameters that they should take into account when taking out a loan, which includes a lock-in period and prepayment charges. MyLoanCare adapts borrowers to active loan management by including these parameters in comparison tools, automatically calculating savings potential, and actively contacting existing borrowers with various possible savings opportunities at different stages.
The market as a concept is increasingly used by consumers for every item they buy, use or consume in everyday life, be it clothing, mobiles, cars or real estate and even investments. . With a similar concept and a significant value proposition in terms of solving a borrower’s various problems, the markets are also rapidly entering the lending segment and emerging as advisers of choice for potential borrowers.
MyLoanCare.in (MyLoanCare Ventures Pvt. Ltd.) is India’s premier online loan marketplace that uses technology to change the way people borrow money in India, making it more transparent, simple and convenient. The platform actively promotes the concepts of research and comparison and active loan management to minimize the EMI burden for the average borrower. It offers home loan, personal loan, gold loan, business loan, mortgage, home loan, credit cards, car loan, two-wheeler loan, fixed deposits and a savings account of over 26 banks and has been consistently rated 4.5 / 5 by thousands of customers for its customer-centric and bank neutral approach. Every minute, six clients apply or compare loans online at MyLoanCare and at any given time between 1000 and 3000 people are actively looking for loans and offers online with us.