Everyone in this world wants to live in their dream home. But, not everyone can afford one right away. With real estate prices shooting off the roof, more and more people are opting for home loans. However, getting a home loan is not as easy as it sounds. There is a lot of paperwork that needs to be taken care of. On top of that, you need to have a good credit score to ensure that you even qualify for one. With so many variables at play, people are finding it increasingly difficult to procure a home loan at a decent rate from banks.
But, fear not. The situation is not as tough as it sounds. As the saying goes, where there’s a will, there’s a way, a lot of FinTech companies help bridge the gap between banks and the people. When the banks are turning away most people, these FinTech companies are using technology to help home loan borrowers overcome all sorts of hurdles. They are helping them out with loans and other financial services. So, it has become much easier to approach these companies than the banks themselves. In the end, technology is helping out these people to dream and hope.
A lot of people who apply for home loans face rejections from banks and other financial institutions. There can be a wide variety of reasons why someone’s loan request was rejected. If you have a bad credit score, you might not get a loan. If your salary does not meet their expectations, you might have to face rejection.
Traditional banks are usually very stringent while giving out home loans. Hence, a lot of people who might want to own their dream homes have to keep waiting and face rejection after rejection. Thankfully FinTech companies are less stringent. This is because they use technology to their advantage in order to approve your home loan. There are no arbitrary judgments involved. If you have provided all the correct documents, chances are you will get a loan from them.
A lot of people do not get loans because of low credit score. Newly-employed people often face this issue because they are still building their credit score. However, you cannot do anything if your credit score is not that high. But, these FinTech companies allow people with low credit scores to apply for loans. Not only that even if you have a low credit score, chances are your request will be approved.
One of the reasons why they are able to do so is that they use the tech they have at their disposal to get an exact idea of whether you will be able to pay back or not. It’s much more accurate and most of the times, you will be able to get the loan.
Interest Rates And Processing Fees
Interest rates are an integral part of home loans. Even if you have a good credit score, you cannot completely avoid this. But, FinTech companies offer lower interest rates than banks. This means you save your hard-earned money by not paying more in interests. The same goes for processing fees. Of course, both the banks and FinTech companies will charge you processing fees. But, chances are you will have to pay much higher fees if you are applying for a loan with a bank. So, you get to save money on interest rates as well as processing fees with FinTech companies. Moreover, processing fees are usually non-refundable. So, if you end up with no loan, your processing fees will remain with the bank.
So, how can these startups and organizations offer lower rates and fees? The answer to this is quite simple. Since these companies operate online, they have lower overhead costs. Also, they use technology to automate most of the tasks so they can also save money by employing fewer people and investing less to analyze documents. Hence, they are able to offer lower rates that the banks cannot.
Time Taken For Approval
This is perhaps one of the biggest hurdles after the hurdle of rejection. With so much paperwork and documents involved in the home loan process, banks take a really long time to approve your loan. You cannot even apply for another loan at a different bank because there is always the chance that you might get rejected. And, if that happens, your credit score gets affected. Not only that, all financial institutions can see that you applied for multiple loans at the same time and that might not be a good thing for your credit reputation.
On the other hand, FinTech lenders can approve your loan in a matter of minutes. Since they have a wide variety of tech at their disposal, they don’t need much longer to verify your documents and information provided.
So, whatever hurdles people used to face while procuring a home loan is now all in the past. It’s really easy to get a home loan now. As long as you provide the right information and have all your documents in order, you will get a home loan.