Business Wire India
Everyone has seen the end of season discount banners "Up to 50% off" displayed outside malls. When a person walks in, he/she realizes most items carry some discount but not as high as the one displayed. Invariably, the ones that they actually like are either on low or no discount.

When it comes to retail loans, lenders advertise loans based on "rates starting" some attractive rate with an asterisk "T&C apply". Few key questions that the customer's faces are:
  • What rate will apply to me?
  • Am I eligible for the loan?
  • What are the other terms and conditions?
  • Will I be able to prepay or transfer the loan easily?
Here's exactly where comes in. Active portfolio management is a concept that most Indian investors can relate to, but the same does not hold for borrowers when it comes to loan management. Today, EMIs constitute one-third to two-thirds of an average household's monthly expenditure, making "Active Loan Management" an absolute must, especially when there are hundreds of "advertised" loan offers to choose from. Managing a loan actively begins before taking a loan and continues even after taking a loan. The process begins with researching and comparing loan offers from multiple banks on the interest rates and all loan terms and conditions.

"Applicable" Vs "Advertised" Rate
MyLoanCare helps one compare loans based on the "applicable rate of interest" as opposed to the advertised rate.
This online marketplace constantly research loan offers of all key lenders in the market and feed the detailed rates and terms into their data bank that sit behind their algorithms. When a person checks for a loan offer with them, the organization tells the borrower the "applicable" rate, which is the rate at which the borrower is likely to be eligible for the loan instead of the "advertised" rate. To put this in perspective, a bank advertising home loans starting at 6.65% may charge rates all the way up to 11% as well. Similarly, a personal loan provider offering the lowest rate of 10.50% may also charge 24% on loan depending on various factors such as customer's income, age, loan amount, loan tenure, credit score, existing obligations, employer category, job stability and many more such factors. In the home loan case, factors such as type of property, transaction, stage of constructions, size, and other property variables also determine interest rates.
Advertisements and news portals, or even banks' own websites, rarely carry such detailed rate sheets or comparisons instead of focusing only on the lowest offered rate.
What is the Eligibility Criteria?
Each lender has its own eligibility criteria and specifies multiple parameters, including demographics, credit profile, income and property (in case of home loans). Even if a lender is actually offering a loan at the advertised rate, what is the assurance that as a borrower, they are actually eligible to obtain a loan from that bank or lender? He/she may be ineligible for a loan from the lender who is offering the lowest rate but end up applying there. Eventually, the application gets rejected, leaving them with little time to apply elsewhere.
Here again, MyLoanCare systems have captured science on whether a person meets one or more lenders' eligibility criteria. So, when they share their profile with, the system not only gives them the options, it filters out the ones where they are unlikely to be eligible and tells them the chances of approval of their loan. This helps borrower decide which lender they should apply with.
Decoding "T&C Apply"
Further, the loan selection must be based on the interest rate and charges like processing fee, lock-in period before prepaying a loan, foreclosure charges, and other associated fees. Customers need to take multiple decisions such as fixed vs floating rate, PLR vs RLLR, EMI vs bullet repayment option, whether to avail overdraft facility or not, optimal loan tenure, to have a joint applicant or not. The list of decision points is long, which can be perplexing for a common borrower. No bank can ever give the borrower the required hand-holding to help them take the most favourable loan decision due to obvious commercial reasons. It is where a marketplace like offers immense value to prospective and existing borrowers.
Keeping "Exit Option" Open
Contrary to common belief, loan management does not end with a borrower getting a loan but continues to be valid as a concept for existing borrowers. There is no reason for a borrower to be stuck with his existing loan when there are enough and ample choices available to optimize their interest expenses during the loan's entire tenure. Borrowers must keep their exit option from the loan open either by way of prepayment or loan transfer to a new lender for getting a low rate or top-up loan. Hence, there are additional parameters they need to be mindful of while taking a loan which includes lock-in-period and prepayment charges. MyLoanCare attunes the borrowers to active loan management by including these parameters in the comparison tools, automatically calculating the savings potential, and actively reaching out to existing borrowers with various possible savings opportunities at various stages.
The marketplace as a concept has been increasingly used by consumers for every item they buy, use, or consume in daily life, be it clothes, mobiles, cars, or property and even investments. With a similar concept and significant value proposition in terms of addressing the various pain points of a borrower, marketplaces are making rapid inroads in the loans segment as well and are emerging as advisors of choice for prospective borrowers.

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