The personal loan market has seen a transformational shift in recent years. Many new players are offering personal loans with minimal paperwork and a completely online ecosystem has made it easier for consumers to take personal loans.
In other words, with the emergence of online personal loan options, an increasing number of consumers are opting for personal loans. Gone are the days when you had to make multiple visits to a bank or a lender to take a personal loan and submit multiple copies of documents. The technological platforms have made the entire process online and hassle-free for the borrower.
Here is all you need to know about how online personal loan is changing the entire finance industry:
Online personal loans are a type of loan option under which a borrower can take a personal loan in a completely online ecosystem. Under this mechanism, a borrower can submit an online application for a personal loan along with digital copies of required documents. The speed of processing and disbursal of an online personal loan is much faster compared to traditional personal loans.
Also, the ticket size of the loan amount is smaller. Online personal loans are also known as instant personal loans in the industry. You can simply apply for a personal loan online on the website or mobile app of the lender.
Online personal loans are very different from traditional personal loan products. Everything about personal loans some years ago included multiple visits to the bank or lender's office and submitting multiple copies of the required documents. Not anymore.
It can be a personal loan for a salaried person or a personal loan with a co-applicant., With an online personal loan, you can simply get access to additional funds quickly and without visiting any branch or office.
Here are the main factors that make online personal loans different:
1. Eligibility criteria
The personal loan eligibility criterion under the online route is much simpler. You just need to submit documents related to KYC and bank statements to get a personal loan. However, do note that the lender will check your credit score before extending an online personal loan to you. Hence, it is better if you have a strong credit score.
2. Minimal paperwork
Most companies that offer online personal loans allow you to upload documents electronically on the website or the mobile app. The documents are processed quickly rather than submitting copies or visiting any branch or office. The minimal paperwork under online personal loans makes it very easy for borrowers to apply for a loan.
3. No collateral
Like in the case of the traditional personal loan, you do not require any collateral to take an online personal loan. Also, as the ticket size and tenure is smaller in the case of online personal loan, it works well both for the borrower and the lender.
4. Fast processing
The processing time in the case of an online personal loan is much faster. As compared to a period of 10-15 days a few years ago, the time taken to process the personal loan application has reduced drastically with online personal loans. Today, online personal loans applications are processed in a few minutes to a few hours.
5. Quick disbursal
In line with the changing ecosystem, the disbursal under the online personal loan is much faster. You can expect the loan amount to be credited to your bank account directly. The physical process of checking and approving the loan applications has been replaced by technology which has led to faster processing and quick disbursals.
6. No hidden charges
As online personal loans are received, processed, and approved by making use of technology, companies share most of the involved charges upfront so that they can build trust with the consumers. You should invest some time in understanding the terms and conditions involved in the transaction.
Gone are the days when lenders used to hide the conditions in the fine print and the borrowers used to discover them years later. Today, companies are very transparent in sharing the involved charges from the start. As you try to get an online personal loan, you would realize that it is a transparent process designed with the consumers' interests in mind.
8. Real-time data
With the aid of technology, you can track your application status, repayment history, balance tenure, etc with ease. Online personal loans have made borrowers more comfortable with technology for their financial needs. You can use your mobile for checking real-time data for your application and your loan account and do not need to contact or email anyone to get those details.
9. Flexible repayment options
As you go for an online personal loan, you have the flexibility to select your repayment option as per your need. It can range from 6 months to 5 years depending on your comfort level. The flexible repayment options make online personal loans a positively disruptive product in the financial services industry.
The online personal loan industry has increased the reach of personal loans in the country. Initially, personal loans were mostly taken in the metros and Tier-I cities. The rise of online personal loans has increased the reach to Tier-II and Tier-III cities.
These are some of the ways in which online personal loans have changed the entire finance industry. These positive changes are being noticed in other categories as well like insurance, car loans, etc. It is expected that the online personal loan industry will continue to help millions of Indians to reach their goals with the help of easy and convenient financing options.
Poonawalla Fincorp offers a completely online personal loan to its customers at attractive interest rates and flexible repayment options. We are known for providing best-in-the-class doorstep service and zero hidden charges. With a vision to be the most preferred financial services brand, we are driven to deliver customer delight at each step.
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