Credit appraisal is an assessment of the various risks associated with repayment of the loan and analysis of credit worthiness of prospective customers. A personal loan is a form of debt given to an individual by without security or collateral by the borrower for the purpose of personal needs, such as durable goods, education, medical care, marriage and other expenses.
KYC process is the essential foundation through which a User (borrower and lender) are verified. The verification level of a User would vary depending on whether he is a borrower or a lender and/or parameters decided by i-LEND. The Key documents considered for verification include:
The KYC process also includes verification of user data online. On registration at www.i-LEND.in, a borrower provides data such as PAN no, Aadhaar ID, etc. which are verified online by our system. This online data is also cross checked with the KYC documents submitted by the user.
Payslip analysis includes the average pay the user gets currently. This is an average number arrived at considering the users 6 months payslip data.
A detailed analysis of the bank statement of a borrower, covering at least 6 months is done on every borrower. The objective of the analysis is to draw a judgment on a borrower’s credit worthiness, derived from the pattern of transactions in the account such as average salary credits, average cash withdrawals, third party payments etc.
A Borrower is also assessed on his online social behaviour by accessing various social profiles like Facebook, LinkedIn etc. User is scored considering his online presence on such sites, groups he is associated with, activity levels on each site etc. This gives an insight on a Borrower’s intent to pay, by comparing similar borrowers across many such parameters. This is evaluated on a periodic basis to check the validity of the same.
Besides the above three parameters, a borrower is also required to submit his credit bureau score, and the same is considered. As per the current regulation, a borrower or a Bank/NBFC can alone access an individual’s credit scores.The borrowers are requested to submit their credit report from any of the existing 4 bureaus.
A Borrower would be rated based on the above parameters by giving appropriate weight to each of these parameters. The weight would be determined by various factors, such as age, income, and the industry in which he works, besides the demographics.
AA (Very Safe (ROI - 12%-15%)) – An obligor rated 'AA' has a very strong capacity to meet his financial commitments without any significant changes.
A (Adequately Safe (ROI - 16%-19%)) - Adequately safe for timely repayment. Reliable and Adequate credit profile.
BBB (Moderately Safe (ROI - 20%-23%)) - Moderately safe for timely repayment of loans. This rating indicates that borrowers are underperforming in some area (e.g. few delay in payments on other loans). However, they have the capability to overcome these limitations.
BB (Moderately Risky (ROI - 24%-27%)) - Considered to be Moderately Risky. Borrower able to discharge obligation quite irregularly but makes the payment, although they are in financial crisis (e.g. Emi’s are High, credit card payments are high due to regular usage).
B (Highly Risky (ROI - 28%-30%)) - The obligor is having issues with timely repayments to other Banks/NBFCs (e.g. high delay in payments, defaulting of loan obligations, also have NOC, cheque bounces, issues related to employment, etc.)