The Indian government’s different initiatives for bringing more and more people under the formal economy have brought attention to the loan seekers. The entire loan ecosystem plays a great role in making a more efficient economy for the country. Attention to this furthermore uncovered the difficulties applicants face while attempting to acquire money.
Digitalization and innovative intercessions over the different financial verticals have additionally prompted the new lending techniques, and fintech is the one who has helped establish a robust alternative credit ecosystem in the country.
As a result of all these different products such as instant loans and online personal loans have come into existence which has revolutionized the lending system to a great extent. These loans are way more convenient than conventional loans. Additionally, these loans can be availed from the comfort of your home. As one can access these loans through their cell phones, without entering a bank. With almost 500 million web clients in the nation, computerized loaning has opened up open doors for an enormous portion of the nation’s population to get to credit.
The New Way for the Things to Work
Previously, banks and NBFCs have not so flexible guidelines that sometimes work against individuals who need small loans. Moreover, the processing time for these loans is so long, that if one is in an emergency, they can’t get these loans on time.
Let’s understand this with an example- if one wants to apply for a personal loan with a bank, according to their eligibility criteria, the minimum amount should be ₹ 2 lakhs and one has to have a salary of minimum ₹ 35,000 plus a good credit score to get the loan. This is a strict and non-flexible criterion which means so many will be deprived of this as all cannot afford to fulfil these criteria. Another fact is many lenders consider lending for small loans as unprofitable stuff and hence, they are not interested in attending a loan application for a small amount.
The hesitance of banks and NBFCs to enter the probably risky small loan fragment has empowered digital moneylenders to rapidly fill the void and gain a huge client base. Digital loans such as instant loans don’t need physical documentation which saves a lot of time and has flexible and minimal eligibility criteria as compared to other loans. Additionally, these loans have no end-use restriction and can be availed in just a few hours making it on the top priority of most of the loan seekers.
Here are Some of the facilities offered by online personal loan
An online personal loan allows consumers to apply for the loan online. This can be done by visiting an online lending platform from their computers or smartphones, fill the loan application form present there, and upload the necessary documents. That’s all, you are done with the application process, no need to go to the bank and coordinate with the executives to take the follow-ups.
Digital lending platforms with their digital loans can assess a borrower’s creditworthiness within minutes through their automated system.
When you apply for an online loan, the lenders tap into various data points and apply predictive models and algorithms to derive useful insights on the borrower to assess applicants’ creditworthiness and ability to repay the loan. The introduction of Aadhaar-based e-KYC has helped digital lending platforms substantially reduce the turnaround time for processing of these loan applications.
Better Customer Experience
The conventional loans were extremely tiring and lengthy that further resulted in poor customer experiences. This was because a loan seeker had to stand in long queues at the bank, file a lot of paperwork and latter had to wait long for approval. The advent of availing the online loan from anywhere around the world and mobile banking has reduced the time you spent to avail a loan. Moreover, the wide availability of online loans ensures hassle-free customer service.
Due to the high demand for online personal loans and the wide availability of lenders, there is a great competition among the lenders, and hence each lender wants to attract more customers through their tempting offers. Hence, it becomes important for a borrower to research well and then apply for an online personal loan with any of the lenders.