Photo: Mint
Photo: Mint

Benefits of taking instant loans through digital lenders

Through digital lenders instant loans can be availed in few minutes in a hassle-free way

New Delhi: People seeking small instant loans— 10,000 to 7 lakh—can go to the digital lending marketplace, where digital lenders bring banks and borrowers together, enable easier access to loans and through automation put all the documentation required in a digital format.

Digital lenders through use of data analytics help in lending various secured and unsecured loan products to consumers in a hassle-free way.

Customers can take instant loans for various purposes like medical emergency, travel, home renovation, wedding, or for buying vehicles and gadgets.

With the help of technology, digital lenders have reduced the time taken up by the lending process—from applying for a loan to its disbursal—from at least a week to a few minutes.

“The digital process takes the paper-based lending process online. The offline process can take anything from one to two weeks, this comes down to as little as 30 minutes," said Adhil Shetty, CEO, BankBazaar.

In the digital process, physical paperwork is not required, the customer doesn’t need to provide personal details such as bank account statements, income details, address and ID proofs. In India, it is simply done through Aadhaar-based e-kyc, which speeds up the verification process, reduces the risk of fraud and the loan amount is disbursed directly into the customer’s bank account within minutes.

But if a customer is new to credit or has a zero credit history then some additional details like income and savings may be required.

“The biggest advantage of digital lending is that the process is quick, easy and (almost) paperless. Customers can get loans at better terms, as they are able to compare loan offers from multiple lenders at one place," said IndiaLends CEO Gaurav Chopra.

On the digital lending marketplace, customers can find different loan offers from different banks and NBFCs and can compare the interest rates.

Using technology and Aadhaar and PAN details, digital lenders tap into the database of customers’ credit and other financial history, which helps them in analysing a borrower’s creditworthiness.

“Digital lending also enables lenders to underwrite the risk better as they have much more data about the customers as compared to a traditional lending system," said Chopra.

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