Borrowing is a crucial financial decision, whether you do it offline or online. When borrowing from a digital lending company, you need to be extra careful to ensure transparency even without human contact. For that, here are five critical factors to tick off.

Things to Check Before Working With a Digital Lending Company 

1.      The Lender's Credibility

Ensure that the digital lending company has a reliable lending history verified by the Reserve Bank of India. Say the lending platform is linked to an NBFC. In that case, ensure that the RBI registers it.

2.      Types of Digital Credit Products

A top digital lending company must offer diverse online credit products to meet different fund requirements. The lender must offer new-age Buy Now Pay Later (BNPL) deals for shopping needs. These allow you to shop without upfront payments at popular online stores like Big Basket, Amazon, Flipkart, Myntra, etc. You can borrow ₹1,000-60,000 and repay it in 90 or 180 days with zero to minimal interest charges.

For personal uses, the lender must offer digital personal loans. These are unsecured, i.e., sanctioned without collateral. The loans come with end-use freedom to finance unlimited goals. These include paying rental deposits, mobile phone bills, holiday expenses, medical expenses, the cost of a 2/4-wheeler and so on. You can borrow ₹15,000-4,00,000 and repay it in 90, 180, 270, 365 or 540 days.

To meet a mix of personal and shopping requirements, the lender must offer a credit line up to ₹1,00,000, including a personal loan and multiple shopping loans. In addition, the lender must charge interest only on the money spent and not the overall limit sanctioned.

3.      Advanced Credit Assessment

The digital lender checks more than just your credit score to assess your creditworthiness. They consider other factors like your smartphone metadata and social media footprint. A leading fintech company uses an advanced credit rating system called the Social Loan Quotient (SLQ) to take these factors into account. The other simple factors considered include your educational qualifications, KYC compliance, salary and career experience. The SLQ score is calculated using artificial intelligence, machine learning and big data analytics for an accurate credit assessment.

4.      100% Digital, User-Friendly Interface

Whether you apply for a digital personal loan, BNPL deal or credit line, the application process, including documentation, should be entirely digitised. Only basic details and minimal documents are asked for. To simplify the registration process, the lender should allow you to log in with your social media accounts, such as Google Plus, LinkedIn, and LinkedIn.

5.      Instant Disbursals

Once a digital personal loan is sanctioned, it should be disbursed to your bank account in a few minutes. A BNPL deal, once approved, should be disbursed instantly to the wallet or gift card of the respective online merchant. For instance, a Big Basket shopping loan must be credited to the Big Basket online wallet or voucher.


Besides these factors, the lending app must be downloadable on both Android and iOS devices to access multiple borrowers across different smartphones.