You love Facebook and spend hours chatting with friends. You keep posting new photos of yourself with friends on Instagram. If you plan to avail a loan, you must be very careful what goes into these posts. Loan officers at a reputed Private bank are busy reading your Facebook posts, SMSes and even payment data from your mobile phone.
These loan officers decide to sanction your car loan or home loan, based on what they see about you on social media. Find this difficult to understand? I'll explain. The main aim of banks when they sanction loans, is to get the money back. Banks try to understand you through social media posts. They are looking for risky behavior.
Do you drink heavily or gamble? Do you drink and drive? Do you live beyond your means? If you do these things, then you will have to kiss your loan goodbye.
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Credit Information Bureau (India) Limited or CIBIL, is a credit information Company. Banks send the details of your loan repayment to CIBIL each month. Based on your repayment history, you are given a CIBIL TransUnion Score between 300 to 900. A score of 750+ is great.
Your loan will be sanctioned in no time. If you fall behind in loan repayments or default on your loan, you get a bad CIBIL score. You loan will not be sanctioned.
1. Banks look at mobile phone data and sanction loans
Gone are the days when banks relied only on credit information bureaus, to study your credit history, before sanctioning the loan. Banks today have gone hi-tech, when deciding if you deserve a loan or not. A reputed Private bank offers you a digital savings bank account, which allows you to save and pay using mobile phones.
If you download this app and give permission, the bank can study your SMSes and GPS. The bank comes to know of your delayed payments, the bills you have paid, the bank notices you have got and replied and how much you get paid.
Using GPS, the banks comes to know your place of residence, where you work, how long you are at your residence or place of work and if you travel abroad...where and how many times...
With phone location data and SMS alerts, banks decide in seconds, whether or not to give you a loan.
SEE ALSO: How to get cheap personal loan?
Banks had a tough time lending to non-salaried citizens like lawyers, freelancers and consultants. It was very difficult to measure their credit history. Even though these citizens had high income, loans were not easily sanctioned.
Banks studied mobile usage pattern, GPS location and SMS alerts of these citizens. Fintech firms use data analytics, social media and algorithms, while making lending decisions.
Want a loan and you have no intention to repay? Forget it. Algorithms decide if you are worthy to get a loan or not.
Your social media footprint (How many likes and comments got on social media posts, how long you have used a particular medium like facebook), all this data is fed into computer systems and algorithms decide if you are worthy of a loan or not.
Banks can check if you are a credible borrower using algorithms.
SEE ALSO: Easy Loans: Loan against mutual funds
You must be well familiar with Swiggy, Ola, Uber and other mobile apps. These apps ask your permission before accessing your mobile data. In much the same way, banks ask your permission and respect your privacy, before accessing mobile data. The only SMSes assessed are the transaction alerts done by banks and wallets and these are not seen by the human eye. Be Wise, Get Rich.
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