With banks and larger financial institutions making it difficult for borrowers to access small personal loans easily, it became almost mandatory for smaller credit institutions to enter the market and cater to borrower needs. Even now, in spite of technological advancements, banks limit their lending services to only a handful of clients, while others are served by lending institutions that have changed the credit game.
Let’s take a look at how technology has made lending so much easier.
Applying from the comfort of your home
Remember all those times you had to travel to the bank, speak to the staff personally, and then make several such trips, to and fro, to apply for a loan? Try not to recollect that, because you won’t need to do it anymore. One of the biggest advantages of banking technology is accessing capital from the comfort of your home with a simple touch of a button. If users are making every transaction online, be it for travel, groceries or otherwise, why shouldn’t personal or business loan applications be equally simplified?
Quick and Easy Application Process
Technology doesn’t just save hours of travel time for every time that you made a quick run to the bank to fulfil application formalities. The amount of time required to complete paperwork has also reduced drastically with online application services that small credit institutions offer. While personally filling out applications and completing formalities may take days, the online process of lending and borrowing documentation can be completed in barely half an hour. This most certainly gives online lenders an edge over offline ones.
As approving offline applications requires manual labour, banks often take months to get back to borrowers, regarding approval and providing cash for personal loans. On the other hand, online lenders like us, complete the process within just a few hours after application submission and the money is often credited to your account in less than 24 hours. With increasing competition both personally and professionally, this is just what SMEs and young applicants need while making quick decisions.
Banks’ underwriting process involves asking for customer credit history and then gauging the credit-worthiness of the person before sanctioning a personal loan. Online lenders have other means of establishing the credit-worthiness of a person, without even asking for credit history. This includes mobile-learning algorithms that determine a potential customer’s income, employment history, savings and more. Availability of this data proves to be a win-win situation for the lender as well as the borrower.
Small loans for every occasion
Most often, banks require you to borrow high-figure loans and pay high-figure interest on these amounts. Smaller credit institutions like ours, lend small personal loans starting as low as Rs. 25000/- with interest as low as 30% p.a. All of these advancements together, have taken over traditional lending and led to the success of the online lending market. It won’t be long before smaller lending institutions will be the first preference of many while borrowing personal loans.