Winning Bizness Desk

Mumbai. Microfinancing may work better in countries where a large population has poor or unbanked banking facilities. Apart from this, microfinancing platforms can also prove to be effective for those who are unable to get loans due to lack of credit history, lag in credit score, lack of documents and identity cards etc. Actually, if these microlending platforms are providing loans to people without completing any traditional process, then data science, AI and machine learning algorithms have the biggest role behind it. In such a situation, not only has it become easy to get a loan here, but money is also available quickly. But it is very important to ensure certain things before applying for a loan on microfinance platforms that make all the hassles easier, so that there is no further trouble.

keep credit history positive

A good credit history reflects your credibility and ability to repay the loan on time. A favorable credit score is the foundation of a good credit history, which ranges from 300 to 900 and any score above 750 is considered better. Maintaining a strong credit score is easy, all you need to do is pay off all outstanding dues on time is. A healthy credit score can also be created by reducing your credit card count. Never spend more than 30 percent on credit cards.

estimating different interest rates

While applying for a loan, you should compare the interest rates offered by different lenders to see that you are getting the lowest interest rate. One can easily compare the interest rates on various financial platforms like Paisabazaar, BankBazaar.

Evaluate each cost

Whenever you take a loan, there are many costs associated with it. Such as processing fee, prepayment fee and late payment fee. This allows you to manage your finances more effectively and easily understand whether applying for a loan makes sense or not.