Fintechs offer quicker loans; banks have lower rates

When looking for a personal loan, borrowers have several options, including banks, non-banking financial companies (NBFCs), and fintech platforms. Each of these financial institutions offers different deals, and the choice you make can affect the loan conditions you receive. Banks generally offer lower interest rates compared to fintech platforms. If cost is a major factor for you, banks might be the better choice. However, it’s important to also consider potential hidden charges. Smaller fintech platforms are more likely to add these extra costs, although this can vary from case to case. Before applying for a loan, ensure that the institution you choose is approved by the Reserve Bank of India (RBI). There have been issues with fraudulent apps in the past, prompting Google to remove almost 4,700 illegal loan apps from its PlayStore. When it comes to loan amounts, banks are better suited for larger loans, typically in the range of ₹10 to ₹15 lakh. Fintech platforms, on the other hand, usually cater to smaller loans, often under ₹1 lakh. The speed of loan approval is another consideration. Banks take about one to two days to approve loans, while fintech platforms can complete the process in minutes or even an hour. In summary, if you need a large sum and can wait for approval, a bank is likely your best option. If you require a small amount quickly, consider a fintech platform, but always choose one that is RBI-approved. Remember, taking out a loan comes with risks, so exercise caution.