Up until the last decade, getting a personal loan was a cumbersome task. With complicated documentations and physical verifications, it could take weeks to process a personal loan application. Also, there was little transparency, because of which it was very difficult to understand the reason for loan rejections. Further, submitting a loan application needed multiple visits to the branch which made the loan process even more tiresome. Because of all these reasons, people were averse to the idea of personal loans. There were also many misconceptions that rooted from the lack of knowledge about the world of finance. But with the advent of instant personal loan through mobile apps, the financial landscape of India has witnessed a tectonic change.
With many lenders offering instant money loan with ease, people’s attitude towards financing has begun to change. Earlier people preferred liquidating their assets over borrowing a personal loan, but today, millennials are open to the idea of borrowing even for their aspirational needs. This change is mostly fuelled by the ease of accessing these personal loans and the increasing financial education among the people.
Read on to discover the 5 ways how online personal loans are revolutionizing the financial industry.
5 ways how online Personal Loans are revolutionizing the Financial Industry
Faster disbursal of funds
In earlier days, it could take several weeks to process your loan application as the entire process was done manually. From collecting your documents to checking your credit score to verifying your details, it took weeks to complete the process. But with an online instant personal loan, theentire loan process is digitalized.
With advanced machine learning and artificial intelligence, lenders could verify your details within seconds. On completion of your detail verification, the loan amount is disbursed within 24 to 48 hours.
Enhanced customer experience
In early days, the lending and borrowing market was unorganized, which means there was no proper system for processing a loan account. This was one of the main reasons why people were averse to the idea of availing a loan. The borrowers were often subjected to harassment or frauds.
But with online personal loans, the perception of loans has changed completely. Today, lenders offer an instant personal loan at affordable interest rates, flexible repayment terms, and they maintain complete transparency of all the transactions. If you opt for a loan through a loan app, then you can check out all the details in just a few clicks. In addition to that, the increased competition of the loan market has compelled lenders to come up with innovative and target specific customised loans.
Today, online lending companies are offering a range of tailored online personal loan options. Among the popular personalized online money loan options are:
- Loans for travel expeditions
- Loans for marriages
- Loans for education and upskilling
- Loans for unexpected medical treatment expenses
- Debt consolidation loans
- Minimizes Operational Costs
In the past, personal loans came with steep interest rates because of high overheads, including staff recruitment and office infrastructure. In addition to that, verifying and evaluating loan applications were both costly and time consuming as they were done manually.
Online lending has reduced the overhead expenses of lenders. The Fintech companies do not have to maintain herd of staff, office equipment, and paperwork. Thanks to technological advancements, most of the manual work is now automated which has resulted in a huge reduction in operational cost. This has made it possible for lenders to offer personal loans at a much reduced interest rate.
Provides More Transparency
With traditional lenders, there was no way to maintain transparency with the customers. The process of getting the loan details was very cumbersome as all the tasks were handled manually. There was a huge gap in communication in terms of loan offers and its related costs. As such, it was very common for people to miss their scheduled payments and feel cheated because of the extra costs they did not know about.
However, with instant money loan, all these issues are sorted easily.Customers get high level of transparency as all the loan details are available at the click of a few buttons. Whether it is understanding the terms and conditions of the loan, comparing the loan offers by different lenders, checking out the various features or keeping a tab on an existing loan, everything can be done through one single loan app. In addition to that, lenders also use advanced technology to send automated reminders and promotional offers to the borrowers.
Minimal paperwork requirement
One of the major hindrances in obtaining a loan was the load of paperwork that one had to furnish to prove their credibility for a loan. Multiple copies of the original documents were needed to be submitted at different desks. This often lead to confusion, mistakes and loan rejections.
With online instant personal loan, the entire process of documentation has been minimized. You just need to submit the digitalized copy of the necessary documents online. Since, a personal loan is an unsecured loan there is no need to submit any documents related to collateral. Also, if you have an existing relationship with the lender then the documentation process is even further simplified.
In conclusion, there is no doubt that online personal loans have revolutionized the financing landscape of India. Not just that, it has also brought about a huge paradigm shift in the minds of people when it comes to managing personal finances. Earlier, people were more concerned about having liquid cash in their accounts to address an emergency, but today, they can rely on the instant money loan to take care of their emergencies. This gives them the freedom to invest their money in long term investment schemes that shows promising returns.
Also, because of the advanced features of personal loans and the customer-centric approach of the lenders, today availing a personal loan is much cheaper than liquidating your investments or using a credit card to fulfil your financial needs.