The government is moving towards making India a less cash-dependent economy and entrepreneurs, banks and individuals alike have had to take to online modes of payment to carry out everyday transactions.
Among several other economic activities and banking transactions, Personal Loans too can be availed online. From applying for a loan to getting it sanctioned, the entire process can be carried out from the comfort of your couch without any hassles of visiting the bank or running around for paperwork. The whole process is completely digital, paperless and presence-less.
Additional Reading: Introducing Paperless Personal Loans
A loan seeker can also look at pre-approved instant loans that will tell him the amount he can borrow based on his credit history. He can make this assessment without actually applying for a loan. This would help him determine his borrowing potential without the risk of facing rejection from the bank.
Additional Reading: Get Instant Approvals On Loans And Credit Cards
If you are an existing customer with a bank, you can avail a pre-approved loan within a few minutes without having to submit any documents. You just need to login to your net banking account and apply for the loan by agreeing to the applicable terms and conditions.
On completion of the application process, the loan amount gets credited instantly to your bank account.
Additional Reading: What Are Pre-Approved Personal Loans?
In order to avail paperless Personal Loans through a loan aggregator or from a bank you do not have ties with, you need to apply for the loan and submit scanned copies of the required documents online, following which the bank verifies the documents and sanctions the loan.
This process is carried out quickly without any human intervention.
Additional Reading: Myths About Pre-Approved Loans
Benefits of paperless loans
The benefits associated with paperless loans include:
Reduced turn-around time: As the entire process is carried out online, there is no need for visiting the bank or submitting documents, which usually takes up a lot of time. With no human intervention, the loan gets sanctioned in the shortest possible time.
In case of pre-approved loans, the bank is well-versed with the customer’s profile and the loan is pre-approved. Disbursement is then carried out in a few minutes.
Additional Reading: 10 Ways You Can Use A Personal Loan To Get The Most Out Of 2017
Fewer hassles: The paperless loan approval process is hassle-free since there is no need for hefty paperwork or running around to get the loan sanctioned. You can sit at home and compare loans from different banks and get a loan sanctioned with a few clicks.
Additional Reading: All About One-Click Application
Documents are safe: With your loan documents stored online, there is no fear of losing or misplacing them.
Things to keep in mind
Availing a paperless Personal Loan might seem easy, but the onus of repayment still lies with the borrower. Don’t let the ease of availing a Personal Loan lull you into a false sense of security.
Since Personal Loans are unsecure in nature, they come with a heavy interest load. Make sure the loan matches your financial situation and requirements, and make sure you have a repayment plan in place to avoid getting into a debt spiral.
Additional Reading: 4 Golden Rules Of Personal Loan Repayment
Before you zero in on a loan, compare loans offered by different banks in terms of interest rates offered, penalties, tenure and associated charges. The terms and conditions vary from bank to bank, so ensure you read them well.
Repeated applications, or applications with mistakes in them, may reduce your CIBIL Score, thus reducing your potential for borrowing in future.