Does Social Media play any role in Personal Loan approval?
Posted: Nov 03, 2018
Does Social Media play any role in Personal Loan approval?
Dominated by the Social Media, this world is fast becoming a small place to be in. The social media and technology have allowed every people to get in connection with others across the geographical boundaries. No matter where you live, all you need is the internet and technology to meet, greet and know any person on Earth. This availability of the internet and social media has allowed people to know a lot in detail about of a person, irrespective of the place, the person lives in.
Social Media – An Instrumental in Image building
The Social Media has been instrumental in the shaping of an image of a person, and the person’s personality can be easily judged by the posts shared, the connections of the person, the comments, and the views as shared by the person concerned. The Social Media allows the people to remain active on latest happening across the world, and you can always remain in touch with your colleagues, friends and your loved ones with several social media platforms like Facebook, LinkedIn, Twitter, Instagram, and others.
Social Media becoming an important asset for lending agencies
While, you have been actively participating on Social Media on various issues, how many of you are aware of the fact that the social media profiles of yours are easily tracked to gauge your capability, your overall image, and personality etc?
Utilization of Social Media for recruitment
You will be surprised to know that there are various Companies, who are highly active in keeping a tab on various profiles for various reasons, on their own. For past decade, the social media has been instrumental in judging person’s overall virtual image, and this aspect has been harnessed by the private companies for hiring purpose. The Companies have been actively keeping an eye on the person’s overall personality for the job recruits, over a decade.
Start of Social Media harness by the Lenders
But this scenario has changed a lot in these gone years, and not only the private companies for hiring purpose but also several lending agencies have been active on social media for various purposes of their own. Thus, in a way you are being tracked by two agencies; one by your recruiters, while the other is your lenders.
So, let’s throw some light on how does Social Media play any role in connection to your lenders.
Social Media, an important asset to prevent loan going default
With the advancement of the technology, the lenders have started to measure the eligibility of the person, based on the overall image of the person on various factors. While, the factors are like CIBIL Score, the laid down eligibility criteria are some of the basic factors influencing your loan capability, there has been some involvement of other factors, which more recently have gained a strong foothold. Especially, when it concerns the Personal Loans, the banks and other lending agencies have been actively utilizing the technology to assess the overall loan eligibility of the Personal Loan Applicant.
Since the Personal Loans are the unsecured loans, the lending agencies have been extra careful while allotting the funds to the loan applicant, thus eliminating any chance for the loan going default. As there is no collateral required to avail the Personal Loans, the lending agencies have been at a greater risk for the loan turns out to be an NPA. Thus, utilizing every opportunity, the lending agencies have been using all measures possible to minimize the risk and thus, started considering various ways like Social Media Checks of the Applicants where the applicant is highly active, in order to gauge the overall personality of the applicant for Personal Loan.
Lenders Check Process at Social Media
The Lenders usually go through the posts shared by the Users, the profile credibility, the comments and various other social media factors to measure the social credit score of the person. The Social Media platforms like Facebook, Twitter and LinkedIn are just some of the most important and considerable platforms which the lenders utilize for their analysis. Also, to let you know, this analysis goes superficially and doesn’t involve breaching of any personal data available at your social media accounts
With the new measure of the lenders being incorporated in the creditworthiness check of the Personal Loan applicant, the access to the funding can see a change. With these measures also coming into the play, there are several people, who earlier don’t possess any credit score on their CIBIL Score and who are new into the system, can also be allotted the funds, owing to their already established credibility with the Social Media. Not depending entirely on the traditional creditworthiness check of the loan applicant, the lending agencies have been swiftly incorporating the news ‘Social Media’ Creditworthiness check of the users.
How does Social Media Impact Personal Loans for borrowers?
It’s the consumer’s behavior, which is highly critical in getting a Personal loan with the highly favorable terms and conditions. The Personal Loan applicant has to be fully trusted to be able to repay the Personal Loan Amount, back to the Lending Agency. There are several factors, which are dependent on the social media image of a person; it’s not only the approval but also the rate of interest, which is highly dependent on how your social media presence is. The various factors are being considered with the utmost propriety, and those lending agencies that have been incorporating the social media presence, have been keen on checking the social behavior of the applicant like stalking and trolling etc. If you are looking to get the better rate of interest on your Personal Loan Application, your Traditional scores along with the Social Scores must be fully intact.
A Deep Check of the Social Media Platforms
Let’s take a look at some social media platforms, which are instrumental in deciding the overall image of a person.
The LinkedIn, widely famous for the professional networks of a person is instrumental in determining the person’s journey in the employment. Being an important part in the availing of the Personal Loans, the employment or the source of income is the factor, which helps the lending agencies in determining the repayment capability of the Person, when it comes to the Personal Loan. It’s the repayment capability of a person, which is thoroughly checked before the approval of the Personal Loan Applicant. It’s the LinkedIn, which serves as the best source of an employment journey of a person, which may detail the lenders with the job history, job duration, professional Position and the interest area of the person. While the Source of income and the job details are being furnished during the time of the loan applicant and all relevant documents are being furnished in support of the claim, the lenders cross check the person’s job history and other details at LinkedIn. It is an estimate that the Person having more than 500 connections and a long duration of the employment history is considered as a favorable Personal Loan applicant by the lenders.
Who’s on the Earth, who is not available on Facebook? The total Facebook users in the world account to approximately 2.23 billion active users, which accounts to approximately just slightly less than 1/3rd of the world’s total population, which stands at around 7.6 billion users. With such a huge number of people available on Facebook, there are no other social media, which can tell a lot and about anyone. The lenders have been utilizing this opportunity of the active users’ counts, and are highly active in keeping tabs on the social media profile of the person.
For the approval factors, the Facebook account should be the genuine one, thus accounting to the ways on how a person is handling the social media. It depends on what the users are posting, and how they are reacting on the social media, which is highly considered an important factor in a person’s overall social media presence, Also, a genuine profile, of a person who is a mutual friend of the loan applicant and who bears a good credit history and strong credit history is an important factor, in enhancing the chances of getting an approval for the Personal Loan for the applicant. If you really are surrounded with friends, who have a good credit history and bear the high creditworthiness in the eyes of the Lending Agencies, the probability is high that the Person might get an approval for the Personal Loan, depending on some other considerable factors.
What goes for the Self Employed Professionals?
If you are self-employed and have your own business, the chances are that the lending agencies will cross-check the social platforms of your business to determine how the business is faring. The strong business presence at social media, imbibe a sense of confidence among the lenders in your business and thus, on you, and the chances are that you will be approved for the Personal Loans easily. It’s the high number of audiences for your business and positive reviews of your business, which states a lot about your repayment capability and thus allows you in getting an approval for the Personal Loans, easily with other important conditions to be met.
Unique Personality Score
With the amalgamation of all social media profiles, and the various factors like SMS Alerts, GPS Location and accounting the traditional ranking factors, the lending agencies rely on the Unique Personality score of the Loan Applicant in order to judge the loan seeker better and more accurately. It’s the latest algorithm, which the lenders rely upon to predict the behavior of the loan applicant and thus reducing the chances of the loan going as NPA.
The new age lenders, and those who are firm believers of the technology involved in their business and to the betterment of the business, they are looking to include the new age algorithm for the analysis of the loan seekers. This algorithm can easily capture the high risk involved with any loan seeker. The consistent outrage on Twitter and any bad comments and bad behavior on Facebook and other social media platforms account for the overall image evaluation of the person.
Even, the lenders may seek in the telephone bills and all other information from their own end to evaluate, if the person is really trusted over the bill payments on time! It’s the machine learning process, which is not evaluated by the human eye, which accounts the overall behavior of the person and thus a process, which is a full proof for the lenders, allows them to approve the loan of the right applicant.
There are lenders who are heavily relied upon the social media credit score in predicting the overall behavior of the loan applicant and where to approve the loan application of the loan applicant or not, while there are many traditional players, who still consider the old traditional Credit history based on past financial transactions to consider the liability of the loan applicants. However things are changing very fast and hopefully, in no time, you will be carrying a Social Score based on your activities with you for your loan approval.
For now, you must remember that the Social Media also plays an important role in the loan application approval, especially in the case of Personal Loans and it’s the time to be aware of what you share on your social media and how you react at social media.
A Good Social Media Presence of a person is fast becoming a very salient feature in the Personal Loan eligibility and everything matters a lot and nothing goes unchecked through the eyes of the lenders when it comes to the evaluation of the social media. With the algorithms and various tools in their hand, your Social Media Eligibility is fast becoming a criterion for the Personal Loan approval.