CRED, a fintech app that facilitates credit card repayments through it and rewards the members has introduced two timely products. One is CRED RentPay, which allows you to avail a line of credit while making your rent payment and keep settling the amount later. The payment can be made through the credit cards. The use of the credit card for paying rent under the CRED RentPay scheme won’t block your credit limit and more importantly, the regular rewards on CRED will be available here too.
This comes after the difficulty people are facing in paying their rents to landlords. Some political leaders have appealed to the landlords not to evict people for non-payment of rents.
“With the option of paying rent on credit, members can free up cash, enjoy the interest-free credit period, and earn reward points on credit card spends. Upon paying their credit card bill, members will also receive CRED coins to spend on products, services and experiences from CRED partners equivalent to the transaction value of rent,” CRED said in a statement.
The other product being introduced is CRED Stash. This has been launched with IDFC First Bank and is again a line of credit which is flexible, bears a low-interest rate and can be availed instantly through the CRED app.
Going ahead, other related payments like maintenance charges etc. could also be added to the CRED RentPay scheme. CRED will charge a nominal transaction fee for RentPay which may be 1% or 1.5%.The model itself is not very different from use of credit cards to buy goods and make monthly payments with/without interest. The process itself is simple since you have to just add the landlord’s bank account details and make the transfer.
The other product, CRED Stash is also designed on similar lines, offering you an easy way to raise some cash to deal with immediate requirements and pay later. CRED has associated IDFC First Bank for this lending programme and hopes to add more banking partners. The interest on CRED Stash could be around 15% since CRED says it will be a third of what you otherwise pay to credit card companies/banks.
CRED has a model where its members are already enjoying good credit scores and therefore it cuts down the time for processing the loan applications. The scheme itself is being made more convenient by pre-approving a loan limit to individuals based on their income and other data provided at the time of registration and allowing the freedom to the member to choose the amount and the payback term. There will be an upper limit of Rs 5 lakh for this. CRED may use its own discretion and extend this pre-approved limit offer to select members on its platform first. The interest will be charged only on the amount availed.
If you are availing the benefit the first time, there will be the KYC verification process. IDFC First Bank will perform its own verification of the bank account provided for routing the repayments by the borrower. Most details will be made available with the app itself.
CRED admits individuals as members based on their credit scores. Brands and institutions associated with the app have to pay a fee.