Chennai: BankBazaar expands its personal loan category with the launch of short-term personal loan products. These are personal loans available for tenors as less as 15 days. They are especially in demand among the younger working professionals to deal with short-term credit requirements, typically around the month end. BankBazaar is flagging off the segment with a partnership with two of the key players in the arena, CASHe and EarlySalary.
The key differentiators between short-term loans and personal loans are their ticket size and repayment tenor. People generally take personal loans for larger amounts of Rs.2-5 Lakhs, which they can repay over the next one to three years.
Short-term personal loans, on the other hand, are used for tiding over small emergencies between pay-cheque-to-pay-cheque, and are charged a daily interest. They usually range between Rs.5000 to Rs.1L, and have repayment tenors ranging from 15 days and 90 days. So, personal loans and short term personal loans both fulfil very different requirements.
“Personal loans have been among the most popular loan products, and BankBazaar is the most preferred partner of both customers and lenders for personal loans. Traditionally, personal loans have been in the range of Rs.1L and upwards and repayment tenors of 12 months and above. There has been a latent demand for small ticket, short-term credit for immediate requirements different from the traditional products. With our new partners, we will be able to provide more choices to our customers who are looking for such small ticket loans with a much shorter tenor,” said Navin Chandani, Chief Business Development Office, BankBazaar.
“Until now, several constraints, such as difficulty in ascertaining the repayment capacity of the borrower, kept short-term credit products out of the mainstream. However, with technology making this easier, it is now possible to create such products so that the customers become the ultimate beneficiary,” he added.
The BankBazaar platform is technically integrated with both EarlySalary and CASHe apps. Targeted exclusively at salaried customers, the category has similar eligibility criteria as personal loans or any other unsecured credit product. Customers would need to submit the application over the BankBazaar website, and then download the app. The application would then be processed basis proprietary algorithms for approval.
Elaborating on the announcement Akshay Mehrotra, Co-Founder & CEO, EarlySalary commented, “We are very glad to partner with BankBazaar to introduce Instant Short Term Loans on their platform. Today, EarlySalary has over 4 Million downloads and disbursing over 30,000 loans a month. We look forward to working very closely with Bank Bazaar to offer instant credit to young professionals and help them borrow seamlessly, without the need of having credit scores. We are working with BankBazaar towards providing a better customer experience to move from just giving short term loans to helping borrow more seamlessly. Our deep integrated API platform allows customers to borrow at a fast pace and typically get loan approvals within seconds. We are also working very closely to help customers get instant loans coupled with a line of credit for other financial needs. We believe we can together build a stronger customer database as well as reach out to a new set of target customers”.
The applications are processed at the partners’ end using Big Data Analytics and proprietary Artificial Intelligence-based social behaviour filtering algorithm in addition to the usual checks. This helps people without credit history to access credit easily. Since the process is entirely online, the checks take a matter of minutes.
Commenting on the partnership, V Raman Kumar, Chairman, CASHe, says. “By Introducing CASHe’s app-based short-term loan products on the Bankbazaar.com platform, we look forward to leveraging the platform’s wide distribution network and its strong customer portfolio, especially in the short-term lending space. We are confident that this partnership will be beneficial for those customers who would have never qualified for any loan from traditional lending institutions. They will now have access to CASHe’s short-term loan products on a single platform. I am happy with our tie up with Bankbazaar.com.”
BankBazaar hosts the widest range of financial products from over 85 of the biggest public and private sector banks, NBFCs, and insurance companies in India. It closed the last quarter (January to March) with 90M visitors. The company raised USD 110M through funding from investors such as Amazon.com, Experian, Fidelity Growth Partners, Mousse Partners, Sequoia Capital and Walden International.