A personal loan available on a digital platform or on an app by lenders is called a contactless personal loan. Also called online personal loan, it requires minimal documentation and the loan amount is sanctioned in less time.
A key convenience offered by an online personal loan is that the borrower can complete the entire process in minutes on their mobile app. They don’t need to make an appointment, visit a branch, etc.
Here are the key elements to know about a contactless personal loan:
Who is eligible to get a personal loan online?
According to Zafar Imam, CEO of FinShell, anyone who qualifies for a normal personal loan is also eligible for PL online.
“Thus, employees working in a limited company, public sector companies or a self-employed person with a minimum income / turnover criteria are eligible for this loan,” said Imam.
However, online personal loan eligibility is largely dependent on the applicant’s credit score or additional data that a person shares with the lender (if the credit score is not available).
According to Anuj Kacker, co-founder of FREO, there are a few cases where additional / alternative information (like age, job type, work experience, etc.) is more important, which allows suppliers to online loans go beyond the traditional lending process.
What types of documents are needed to qualify for an online personal loan?
While there are literally hundreds of types of personal loans available today, Prithvi Chandrasekhar, President, Risk and Analysis, InCred, said almost all of them require the same basic documents that can easily be scanned.
“This is proof of identity and address (eg PAN card, Aadhar card, driver’s license, passport, etc.), proof of income (eg bank statement, statements of income tax, etc.), and proof of employment (eg pay slips, employer ID card, etc.), ”explains Chandrasekhar.
What is the interest rate for online personal loans?
The interest rates for online personal loans vary from borrower to borrower, which makes them unique in nature. It doesn’t matter whether the borrower is online or offline.
According to Kacker, a borrower with a very good score can get a loan of 10-11%, while a borrower earning a moderate to high salary can get a loan of up to 15%, which can go up to 20%. or 30. percent.
Most lenders use a risk-based pricing model, according to Imam, which is largely based on customer profile, income and repayment capacity, credit history, etc.
When Customers Are Stuck While Processing Personal Loans Online?
Chandrasekhar believes most clients are able to navigate online processes smoothly. However, some clients do not have digital versions of supporting income, residency or employment documents.
“In these cases, they can scan and download traditional paper documents themselves. Many lenders have technology that also allows them to read and consume these scanned documents, ”added Chandrasekhar.
When the loan process cannot be completed totally online?
For digital lenders, especially app-based ones, Raghuvir Gakhar, CEO of CashBean, explains that without digital verification, it’s hard to get credit.
“Our systems operate on fast TAT principles and without the process being completely digital, the exercise will not be successful for us or the borrowing party. Therefore, for digital loans, it is imperative to complete a online verification without which the loan will not be disbursed. in parallel, we also have our PV service (telephone verification) which checks each new profile / candidate by calling them for certain oral verifications of the borrower’s details ”, he explains.
In addition, there are a few processes like KYC, which cannot be fully automated due to different requirements.
“While technologies like Aadhaar Online Verification, eKYC, and Video KYC have made the lending process 100% online easier, there are still a few hurdles preventing KYC from going 100% digital. deal with the KYC process being completed online, while others prefer not to do it, ”Kacker added.
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