Over the past decade, the financial technology industry has grown at an incredible pace worldwide. India has also seen this impact, with many large companies investing in products and services suitable for the financial sector. According to the latest statistical survey by The Times of India, it was estimated that the outstanding portfolio of personal loans had increased approximately 48% in a single financial year, from INR 26700 Crore in March 2019 to INR 39700 crore in March 2020.
You would be able to tell the difference in paperwork and time if you had applied for a loan some decades ago. It was complicated because of the many forms required, the numerous attested photocopies that must be attached and the frequent visits to the lender. The fintech industry has seen a significant shift in the past few years with the advent of digital technology. Today, it is easier to get a loan application approved, thanks to the availability of a smartphone.
Before smartphones, banks and NBFCs were primarily focused on metros and tier 1 cities. This left a large portion of the population untracked. Due to high overheads, such as setting up physical offices and hiring staff, lending was very expensive. Because of the physical effort involved, it took many days to approve and verify applications.
The way we borrow and lend money from banks has been completely transformed by digital technology. Reputable lenders such as banks and NBFCs now have an online presence. Fintech companies have launched websites, portals and mobile apps, taking the loan process to new heights.
From applying for approval of a personal loan to now, it takes 24-36 hours. This significantly reduced from the 10-15 days required a few decades ago. Online applications and the uploading of documents have replaced the burden of paperwork. Photocopying is also eliminated.
An API has replaced the process of authenticating credit scores to approve an application. This has reduced the turnaround time to just minutes. Online lenders have entered the country’s hearts and reached out to every person with a smartphone. India currently has more than 700 million internet and 600 million smartphone users. Personal loans are today the most popular financing option. Let’s look at the characteristics of a personal loan to see if it is a customer-friendly option.
What is an online personal loan?
Personal loans are loans of small amounts that can be transferred directly to your bank account. It’s usually in the form of credit with a shorter repayment term. This activity is carried out by many microfinance firms that offer loans to individuals for various needs. These finance companies offer a mobile app or a web portal that allows you to apply for a loan and access funds.
The shift within the pattern
Many people can now get shorter cash credits thanks to online personal loans. It was difficult to apply for a small loan from any bank before the advent of technology and smartphones. The entire loan approval process has changed. Now it is much easier to apply online for loans. We highlighted the following benefits of online personal loans.
*Simple eligibility criteria: Many online personal loan companies offer loan approvals based on simple eligibility requirements. This allows a wide range of people to apply online for small-ticket loans. This type of loan can only be obtained if you have excellent credit.
*Less paperwork, Paperless Transactions Most companies offer a simple documentation process using mobile apps and electronic uploads. You can apply for a loan online from your home without going to a bank or office.
You Do Not Need Financial Collateral. If your credit period is shorter, these loans are available to work professionals who need to pay for services before their next paycheck. You do not need any assets to be approved for a loan.
*Faster Document Processing: Your loan amount and documents will be processed in minutes. If your credit is good, your loan amount will reflect in your bank account within 24hrs. Once you meet the eligibility criteria, the process ends with the loan amount required for disbursal.
The Loan Amount can quickly be disbursed. You will need to provide your bank details, IFSC, account numbers, and other information. The entire amount of the loan will be reflected in your bank account. You can access the portal to make payments online or to buy different items from the portal.
There is no hidden charge. If you apply for an online personal loan, please ensure you read and understand all terms and conditions carefully. Evaluating the loan portals and deciding after you have viewed them on the website or mobile application is easy.
Transparency: Personal loans have become more transparent with the introduction of automated systems and technology like artificial intelligence. Personal loans are granted based on the applicant’s merit. A defined process is followed throughout the loan application processing. You will be informed of any problems with your profile and can take the necessary steps to correct them.
*Real-time application tracking another great benefit of personal loans is live tracking of your loan applications. You can monitor your loan application status via your smartphone or computer once you have applied. You will also receive regular updates from your lender about the loan application status. You will be able to track the status of your loan application and can also submit additional documents if necessary.
*Competitive interest rates: When branch managers managed loan rates, Gone were the days. Personal loans are not subject to favouritism. The interest rates are very competitive, and you will be informed before you submit the application form. The interest rate is available to all customers. It is determined based on your profile and not by any manager, eliminating human bias.
*Flexible repayment options Personal loans allow borrowers to receive reimbursements quickly and easily by offering flexible repayment options. The repayment term you choose can be as flexible as your needs. It can vary from 6 months to 60. You can choose EMI options you can afford. Prepayments after six months are almost always free of charge.
Excellent customer service: Many financial institutions offer instant personal loan approvals and provide 24×7 customer care. Chatbots and email can quickly resolve any questions or queries you might have. This will give you peace of mind and a quicker resolution to your financial problems. LoanTap, a leader in fintech, offers tailored personal loans to meet a wide range of needs. LoanTap provides personal loans starting at Rs 50,000 and ending at Rs 10,00,000. The terms are between 6-60 months, with an interest rate of 18%.