If you’re seeking a hassle-free way to access funds, a digital personal loan may be the perfect fit. Processed entirely online, these loans are fast, convenient, and require minimal paperwork. In contrast, traditional loans often involve in-person bank visits, extensive documentation, and a slower approval process. Understanding these differences can help borrowers choose the option that best suits their needs.
Difference between a Digital Personal Loan and a Traditional Loan?
|
Aspect |
Digital Personal Loan |
Traditional Loan |
|
Application Process |
Online application process; borrowers can apply conveniently from anywhere. |
Borrowers must visit the physical branch to complete the loan application process. |
|
Applicable Interest Rates |
Digital Personal Loan interest rates are typically lower than those offered by traditional banks. |
Traditional loans typically have higher interest costs due to higher operational costs. |
|
Applicant Experience & Customer Support |
Streamlined & convenient; faster approvals & digital access to funds; prompt access to customer assistance through online channels. |
Personalised face-to-face customer service can be time-consuming, as physically visiting more than one bank is required. Delays and late disbursal of funds are common. |
|
Terms of Repayment |
Flexible repayment terms, ranging from a few months to years. |
Generally, fixed repayment terms & schedules are determined by the banks. |
|
Documentation Process |
Paperless; upload scanned copies of the necessary documents for the personal loan, including ID proof, bank statements & income proof. |
Submitting physical documents provides a sense of security for certain borrowers, but extra time and effort are a given. |
Why Are Digital Loans Preferred in the Modern Age?
Digital personal loans are preferred in the modern age because of their unparalleled speed, accessibility and flexibility. From application to fund disbursement, the process is entirely online, which eliminates the need for in-person intervention.
As per the Fintech Association for Consumer Empowerment (FACE), “Fintech NBFCs' digital personal loans (₹49,000 Cr), worth 12% of the personal loan market by sanction value in H1 FY 24-25, continue to expand formal credit…” These statistics make sense considering these digital loan upsides:
1. Fast Approval & Disbursal of Funds
Digital personal loan amounts come with instant approval. Some digital lenders provide pre-approved offers, allowing eligible customers to get a personal loan instantly by checking their eligibility online, often using just a mobile number.
This is especially useful for emergency expenses, as funds will be immediately credited to your bank account without you having to wait. Traditional loans typically take longer to get approved and can take a few days to a few weeks.
2. Minimal Paperwork
The need to wait in long queues/submit heaps of paperwork is eliminated. You can apply for a digital personal loan from anywhere, meeting the minimal documentation criteria.
As part of this streamlined process, digital lenders may check your credit score and credit report online to quickly verify your creditworthiness.
3. Flexible Loan Tenure
Opposed to rigid repayment periods associated with traditional credit, digital personal loans allow you to choose a repayment tenure that suits your needs and aligns with your financial capacity. This flexibility makes complying with the repayment schedule a stress-free task.
4. Transparent Procedure
Online instant personal loans lending platforms communicate the interest rates, monthly payments (calculated with the personal loan EMI calculator), and other charges upfront. All loan details, including personal loan fees such as the processing fee, are disclosed clearly at the time of application. GST is applicable on these fees and charges, except for the interest component. Go through the relevant personal loan interest rates, starting at 9.99% p.a., with zero hidden/extra fees.
5. Simplified Eligibility Criteria
With Poonawalla Fincorp, you don’t have to keep waiting to find out whether or not you qualify for a loan. There’s zero need for guesswork. The eligibility criteria are straightforward, so you can review them at once and proceed with the application process.
6. 24x7 Access
Traditional banks only process loans during banking hours. On the other hand, you can apply for digital personal loans anytime, even during holidays or weekends. All you need is access to your phone and the internet.
7. Convenient for Different Categories of Professionals
Regardless of whether you’re a salaried or self-employed individual, you can apply for a personal loan with Poonawalla Fincorp. Meet the basic eligibility requirement, and you're good to go.
8. Fully Secure Online Process
Digital loan applications, in collaboration with reputable NBFCs such as Poonawalla Fincorp, ensure encrypted verification steps. So, you can rest assured knowing your data will be safe throughout the loaning process.
When to Choose a Digital Personal Loan?
- If you prioritise speed and convenience while opting for a personal loan;
- If you’re comfortable with online platforms, &
- If you’ve got urgent financial obligations to meet, choose digital personal loans.
- If you need to cover emergency expenses, digital personal loans are ideal due to their fast approval and quick disbursal.
- If you want to transfer your outstanding loan or outstanding loan amount to another lender for better interest rates or terms, digital personal loans are suitable for loan balance transfer.
If this option sounds more convenient to you, make sure to check out Poonawalla Fincorp’s Personal Loan. Opt for up to ₹50 Lakhs at competitive interest rates, starting at only 9.99%* p.a. Repay the amount flexibly over 12 - 84 months, as per your financial capacity.
When to Choose a Traditional Loan?
- If you value face-to-face, personalised interactions with the executives;
- If you’ve got complex queries needing detailed explanations;
- If you wish to negotiate the loan terms in person, a traditional loan could be a better fit.
To Conclude
In today's online age, choosing between digital personal loans and traditional loans comes down to your priorities. Digital loans are convenient, quick and offer a seamless experience. This is suited to urgent needs as well. Traditional loans, on the other hand, provide face-to-face interaction and dependable assistance, building confidence and establishing peace of mind. So, choose what best fits your requirements.
If you’re leaning more towards digital personal loans, make sure to check out Poonawalla Fincorp’s instant personal loans. Avail up to ₹50 Lakhs at an interest rate starting at 9.99% p.a., alongside unlocking tenure flexibility and a transparent process!
FAQs
Can I safely take a personal loan online?
Yes, you can safely apply for a personal loan online with trusted NBFCs like Poonawalla Fincorp. The associated digital system implements secure procedures for verification and quick disbursal. Your data shall stay protected as you enjoy a hassle-free application experience.
What are the eligibility criteria for a digital personal loan?
You must be an Indian citizen between the ages of 21 and 60 to apply for a personal loan online. Next, you must have a full-time job at a Central Gov., MNC, PSU, Listed, Unlisted Public Ltd, LLP, Pvt Ltd or any company internally listed. Your monthly income must be ₹30,000, and you need 1 year of work experience (at least 1 month of stable employment at your current company).
Can I use the digital personal loan to pay for home appliances?
Yes, you can use the digital personal loan to pay for home appliances. The loan option with Poonawalla Fincorp is not associated with any end-use restrictions. So, you can use the funds as you deem necessary.
What is the lowest EMI requirement per month?
The lowest Personal Loan EMI requirement is ₹2,124* per Lakh for 60 months with Poonawalla Fincorp.
Can I take a digital personal loan of ₹20 lakhs?
If you meet the eligibility requirements, you can unlock a loan amount of ₹20 Lakhs to meet your financial obligations. Poonawalla Fincorp offers a personal loan up to ₹50 Lakhs to empower financial flexibility.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply