Friday, October 6th, 2017
How Your Social Media Behavior Can Affect Your Loan
According to a 2016 TOI article, consumer social media behavior is critical to getting a loan with favorable terms. What you do on social media not only affect your chances of getting a loan, it also decides the loan interest rate. Whether you get a loan at 9% or 30% against the industry interest rate of 13%-17% largely depends upon how you behave on different social media channels. Online manners like trolling or stalking someone, therefore, could not only spoil your chances of getting a personal loan, it could also affect your negotiation power for interest charges with the lender.
Both new-age lenders and online credit marketplaces run their due diligence on borrowers not just based on orthodox metrics like pay slips and bank account statements, they largely rely on algorithms that mine non-conventional data such as, SMS alerts, GPS location and social media behavior in order to derive a unique personality score as a measure of borrower reliability. Such algorithms can capture the high-risk behavior of a consumer and determine whether or not he lives beyond his means. Emotions such as anger or people raging on social media channels like Twitter are also spotted. In addition, many app-based lenders rely on browser history of search engine keywords and websites visited, including engagement on Facebook, LinkedIn, Twitter and E-Commerce sites. Some players also pool data from telecom providers to check whether a consumer pays phone bills on time. None of this information is stored or seen by a human eye. Robots analyze the data to arrive at a decision, on behalf of lenders.
While online marketplaces facilitate access to bank loans at competitive interest rates, app-based lenders such as CASHe provide short-term personal loans through their NBFC partners. Paisabazaar, an online marketplace, has recently tied up with CASHe to take advantage of its app-based platform for providing instant personal loans to salaried millennial customers, who cannot get a loan from banks due to poor credit; CASHe provides instant loans without credit checks. It uses its own proprietary algorithm named social loan quotient (SLQ) to arrive at a decision on lending. While traditional financial institutions depend on credit history based on past transactions, SLQ relies on your current data such as, mobile and social media footprint, education, monthly salary, and career experience. SLQ is a dynamic credit scoring system that evolves for you as you engage more with the digital world including CASHe.