Monday, November 17, 2003		Guest Speak

Loan is just a click away
Harsh Roongta

Harsh Roongta CEO, Apnaloan.com

THE recent boom in consumer finance has seen more and more banks with an ever increasing array of loan products enter into the market. Whatever be the requirement — a home loan or any purpose personal loan , you can be sure, there will be many products available in the market vying for attention. Even if you have a specific need, chances are there is a loan product that meets your needs exactly. The loan consumer never had it so good.

The flip side to all this is that all this ends up confusing the loan consumer. During the "good old days," when the banks had fixed rates for their loan programs, consumers queued up to find out if they were eligible for the program and the quantum that they were eligible for was a "comfortable" arrangement. The loan consumer knew the limited range of products that were available and was sure that he was getting a fair deal. However, competition these days means the banks are willing to structure special deals for consumers depending on the credit profile (high declared incomes, employment in large well known companies, professional degrees in medicine, accountancy, architecture, etc) or loan sizes (some companies like larger loan sizes and are willing to provide special deals for such consumers whereas some banks like smaller loan sizes).

In other words, it is a bargain basement where a savvy-consumer can walk out with a deal while his equally placed neighbour with a similar requirement may not get a good deal. Since the rates and other terms and conditions are now clearly negotiable, there is no alternative to looking around and get a feel of the market.

This kind of situation is ideal for the Internet since exploring the market is far easier done from the comfort of one’s room. Overseas, the Internet as a medium to close loans is gaining increasing prominence. In India, the Internet is a great starting point only. You could get the announced rates on various bank’s Websites to give a rough idea about the market. You could also go to marketplace Websites where you may get comparative charts of various schemes of the banks and comparison between the same not only for interest rates but on other terms also (such as fee structures, prepayment charges, eligibility norms, etc).

Most of these Websites provide a form that you can fill to enable them to get back to you with a more structured product suitable for your needs and profile. Remember, more the information you give, the better are the chances of ending up with a finer deal. However, please remember that every deal that is given is negotiable to some extent and probe all aspects fully before finalising the lender. You could also deal with loan marketplaces which will give simultaneous offers from various banks based on the profile and need. Even here once you have compared various options, target the most suitable one and then bargain for better terms. The advantage here is that you would have already seen competitive offers from other banks as well thus giving you a better idea about the range of the market. A list of bank Websites and marketplace Websites are given in the accompanying table.