India has witnessed a remarkable surge in digital personal loans, revolutionising the way individuals access financial resources. The rapid adoption of digital platforms and advancements in technology have paved the way for convenient and accessible lending options. Discussed here are the reasons for the rising popularity of digital personal loans along with their benefits.
Reasons for the rise of digital personal loans
Quick approvals
With advanced algorithms and automated processes, digital loan applications are processed swiftly, providing borrowers with rapid access to funds.
Convenience
Digital personal loans eliminate the need for tedious paperwork and time-consuming visits to physical branches, offering unparalleled convenience.
Ease of accessibility
Digital loans can be availed from the comfort of one’s home, using just a smartphone or a computer, making them easily accessible to a broader population.
Improved financial inclusion
Digital loans have played a crucial role in bridging the financial inclusion gap, providing access to credit for individuals who were previously excluded from the formal banking sector.
Minimal documentation
Unlike traditional loans, digital personal loans often require minimal documentation, simplifying the application process.
Benefits of opting for digital personal loans
Flexible loan amounts
Digital loan platforms offer borrowers the flexibility to choose loan amounts as per their specific needs, ensuring that they borrow only what is necessary. Example: Ms Singh required funds to renovate her home. With Money View Loan, she could select the loan amount that matched her renovation budget.
Emergency funding
In times of unexpected financial emergencies, digital personal loans act as a reliable source of immediate funds, enabling individuals to meet urgent financial obligations. Example: Mr Sharma needed urgent funds to cover medical expenses for his father’s hospitalisation. He applied for a digital personal loan through Money View Loan and received the required funds promptly.
Competitive interest rates
An online personal loan usually has a competitive rate of interest, making them an extremely affordable choice for loan seekers. For instance, Mr Patel chose a digital loan from Money View, which provided him with a lower rate. This resulted in considerable savings than other lending choices.
Flexible and convenient loan repayment options
Digital loans provide complete flexibility in making loan repayments, permitting loan seekers to select the repayment tenure that best matches their financial potential. For instance, Mr Ravish chose a higher repayment tenure via Money View, which lowered his month-on-month repayment liability, offering him complete financial flexibility.
Transparent loan procedure
Online loan platforms offer loan seekers thorough transparency, ensuring they understand the conditions better before availing a loan. For instance, Ms Rawat appreciated the transparency offered in Money View, where she could simply access all details regarding the rate of interest, charges, and loan repayment schedules.
Minimal physical interaction
During the COVID times, digital loans proved a prudent choice as this lowered the requirement for physical interaction and ensured thorough convenience and safety. For instance, Mrs Raje was concerned about maintaining social distancing while opting for a loan and hence chose a digital loan as this removed the need for physically visiting the financial institution.
Budgeting and financial planning
Platforms of digital loan offer loan seekers with loan management instruments, allowing them to better track their loan repayment progress as well as manage their finances well. For instance. Ms Kumar used the Money Loan application to effectively monitor her loan repayment status. This allowed her to plan out her finances well.
Credit score and profile amelioration
Timely and full repayments of digital loans can have a positive effect on seekers’ scores and profiles, which increases their future loan approval prospects. For instance, Mr Rajesh, by diligently paying his loan, was able to improve his score and profile, paving the way for more financial opportunities in the future.
No security required
Most digital personal loans are unsecured, eliminating the need for collateral, and making them accessible to a wider range of borrowers. Example: Mr Khan, who didn’t possess any significant assets for collateral, could still avail a digital personal loan from Money View Loan based on his creditworthiness.
Credit score building
Digital personal loans offer an opportunity for individuals with limited credit history or low credit scores to establish or improve their creditworthiness. By repaying their digital loan on time, borrowers can demonstrate responsible financial behaviour, which positively impacts their credit score.
24×7 customer support
Leading digital loan platforms like Money View Loan offer round-the-clock customer support, ensuring that borrowers can seek assistance whenever needed. Example: Ms Sharma contacted the Money View Loan customer care team to resolve her query regarding the loan repayment schedule, receiving prompt and helpful guidance.
Paperless process
Digital personal loans in India eliminate the need for extensive paperwork, as the entire application and documentation process can be completed online. This saves borrowers valuable time and effort, making the loan application process hassle-free.
Loan disbursal in minutes
With digital personal loans, borrowers can receive loan disbursements within minutes of loan approval. This is particularly beneficial during emergencies when immediate access to funds can make a significant difference.
Flexible eligibility criteria
Digital loan platforms often have more flexible eligibility criteria compared to traditional banks. They consider various factors beyond just credit score, such as income, employment history, and alternative data points, enabling a broader range of individuals to qualify for loans.
Customised loan offers
Online platforms make the most out of the algorithms and analytics to offer customised loan deals depending on the individual’s finances and profile. This ensures the seekers get loan deals that are customised to their needs as well as repayment potentials.
Higher security
Digital loan platforms usually employ pragmatic security measures for safeguarding the loan borrowers’ financial and personal details. This involves two-factor authentication, data encryption and stringent privacy policies. All these ensure the safety and confidentiality of sensitive details.
Loan comparison
Online loan platforms allow loan seekers to swiftly compare distinct loan deals from multiple loan lenders effortlessly. This permits them to make better decisions by factoring in parameters like processing charges, rate of interest, loan repayment tenure and various other conditions.
Transparent charges
Online personal loan lenders tend to provide transparent fee structures. They clearly outline all the fees and charges like late payment charges, prepayment penalties, processing charges, etc. This transparency assists loan seekers in better understanding the loan cost implications before borrowing.
Simple documentation process
Digital loans need fewer documents than traditional credit options. Usually, loan seekers require just the basic income and identity proof documents. This makes the loan application procedure less time-consuming and more convenient.
Reduced EMI options
Digital loans often have flexible EMI (equated monthly instalment) options, permitting loan borrowers to select the repayment schedule in alignment with their financial potential. Such flexibility allows loan seekers to manage their cash flow effectively and with ease.
Ending note
As digitalisation continues to sweep across our country, online or digital loans have come across as a game-changer, providing loan seekers with convenient, quick, and flexible credit access. Platforms such as Money View, MoneyTap, LendingClub, Upstart, etc. leverage technological advancements to offer a seamless and hassle-free borrowing experience. This allows individuals to meet their various life goals, face financial exigencies and bridge a massive gap between their goals and reality with ease.