Tech-based loan aggregator platform SwitchMyLoan raises pre-Series A funding

Mumbai-based lending aggregator Switch My Loan recently closed its pre-Series A funding round led by O2 Angels Network, a Noida-based angel syndicate and deeptech accelerator. The round also saw the participation of marquee investors Rajesh Ranjan in his personal capacity, Dr Jaydeep Thaker and family, Angel Scions, and Sirius One Capital Fund, a SEBI-registered alternative investment fund.

SwitchMyLoan plans to use the funds for technology development and business expansion, said Chintan Panchmatiya, the startup’s founder, in an exclusive interaction with YourStory. However, he did not disclose the amount and valuation. 

“We are working to develop an AI-powered credit underwriting bot and also plan to increase our physical presence pan India,” he said.

Founded in March 2021 by Chintan Panchmatiya, Himanshu Panchmatiya, Hemali Bhatt, and Raj Kariya, SwitchMyLoan is a tech-based loan aggregator platform that strives to provide customers a simple, hassle-free, and personalised experience. 

Chintan and the other co-founders identified the gaps in retail lending products, mainly those in the mortgage market. They also noticed that borrowers had difficulty in identifying the right lender as per their needs.

Finding a loan that suits your needs is a tiresome journey with various steps—right from selecting the lender and getting clarity on the total cost to be incurred to lengthy documentation and following up with the lender on the status of the loan. The latter involves multiple visits to the lender branch. 

The founders also realised that customers were not updated about the latest interest rates. Many of them were stuck with loans at a higher interest rate and did not know that they could get the same product at a lower interest rate. 

Hence, Chintan and the others envisaged a digital platform that could solve all these problems. 

SwitchMyLoan brings multiple products and lenders under a single roof and guides and assists customers in the end-to-end journey of availing themselves of a loan. It aims to facilitate secured and unsecured loans through a network of more than 85 lenders, including both private and public players. 

Lenders on the platform include HDFC Bank, ICICI Bank, Axis Bank, TATA Capital, Bajaj Finserv, Aditya Birla, Union Bank of India, Indian Bank, State Bank of India, Bank of Baroda, Bank of India, and Central Bank of India.

“SwitchMyLoan works closely with customers to understand their needs and offer them the best solutions possible. It is committed to educating, guiding and supporting customers—both for new loans and for switching of loans,” explained Chintan.

Switching lets users change the type of loan (for e.g. fixed versus variable interest rate) and repayment mode without completing a new loan application.

What the startup offers

SwitchMyLoan, on its website, provides various options for home loans, loans against property, business loans, personal loans, auto loans (used car and new car), loans against securities, and education loans.

The platform does an eligibility check and helps customers with accurate loan offers from lenders on the basis of the declared details. 

The startup seeks to make the borrowers’ loan journey easier through an AI-based self-assessment tool. The self-assessment engine helps customer avail themselves of real-time offers on the basis of the details declared by them—personal information and income details. 

“On the basis of the details, we do AI credit underwriting and show them the offers for which they are eligible,” said Chintan. 

“We are working to develop an AI-powered credit underwriting bot to do paperless credit assessment of the customer,” he added.

All the documents are collected digitally from the customers, and they are given access to a customer dashboard wherein they can view the real-time status of the loan application. Real-time communication is also sent on SMS and email to the customer. 

On SwitchMyLoan, customers can not only see offers from multiple lenders but they can also play around with the EMI or tenure to see where they can get more benefits and how much money they can save as per the offers generated. 

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“Every lender has a different borrowing cost depending on their rating (higher the rating, lower the cost and vice versa), due to which rates differ. Credit score is also one of the important criteria. Assuming a salaried customer has a running home loan at 9% with Lender A, SwitchMyLoan analyses the case of this customer and helps him move to Lender B at 8.40% or lesser, which is the minimum home loan rate in the market,” said Chintan.

Growth and future

SwitchMyLoan competes with players such as Paisabazaar and Bankbazaar.

Speaking on SwitchMyLoan’s differentiation, Chintan said, “As per our knowledge, Paisabazaar and Bankbazaar are lead generation platforms, whereas SwitchMyLoan is into lead generation as well as end-to-end fulfilment. Also, we are into auto loans and loan against securities."

The startup, which started with a team of two, now has more than 120 employees. It has branches in Pune, Nashik, Ahmedabad, Bangalore, Hyderabad, Kolkata, Surat, and Bhubaneshwar. It plans to expand to the northern region soon.

Over 2,700 users are registered on SwitchMyLoan. The startup says it generated a revenue of Rs 6 crore in FY23. In future, it also wants to be an NBFC and get into lending. 

“As per the RBI regulatory guidelines, in the coming years, we will partner with banks for co-lending,” said Chintan.