In this day and age, the process of securing a personal loan has become much speedier and simpler, thanks to the influx of various technology-induced lending practices. Presently over 1500 Fintech companies are functioning in India, which has radicalized the personal loan market, scrubbing off the shine and shimmer from the customary banks and several financial institutions. With myriad appealing features such as instant loan approval and paperless documentation and processing, you can greatly benefit from these unsecured loans by means of the online course.
The process of a personal loan application through a bank has always been immensely time-consuming and tiresome. The whole process may span over weeks before you get the loan deposited into your account. That is why, customers, mostly do not consider such personal loans to come to the aid of, in urgent circumstances, because of the laborious methods employed by the traditional banks.
The stumbling blocks in traditional lending practices
Conditions flung down by banks about loan eligibility, sanctioning etc. are found to be uncongenial and annoying to customers.
Repeated visits to banks
Notwithstanding the fact that most banks have Online Personal Loan Application Forms, they only serve as a ‘Declaration of Interest’ and must be trailed by recurrent visits to the bank for taking the application forward. Burdensome and clumsy documentation: The rundown of documents to be furnished is excessively lengthy, and you wind up investing significant time and energy to gather the necessary documents from sundry sources. It does not really end there. You may receive future callbacks from the banks asking for re-submission of additional documents.
The requirement of collaterals
Personal loans are deemed as collateral loans meaning that your bank looks for surety, such as a cash deposit, a co-applicant, or an owned property, against which your loan approval can be brought about.
Devoid of transparency
As a loan seeker, the aspects of your urgency and intent may get bogged down under the heaps of policies and documents your bank demands. The absence of any well-timed and compelling correspondence and transparency will strike you with utter despair with no good fortune.
There may likewise be a situation where you discover your application been rejected with the bank caring no lesser to offer a valid reason. Also, the estimation of the loan amount and EMI lies with the absolute discretion of the bank.
Higher processing and fore-closure fees: Traditional lending foundations such as banks charge 2% – 5% of the approved loan amount as the processing fee, no matter what. Pre-closure of the loan may also pull in a charge, contingent upon the phase at which you are choosing to close the loan.
Why instant personal loans preferred over traditional loans
Instant loans have effectively helped in the elimination of these deterrents for potential customers and opened the doors for trouble-free online loans. Here are some essential attributes which are worth one’s weight in gold:
Expeditious online application
Technology-powered lending actions have set in motion the concept of online loans, where the whole gamut from loan application to loan disbursal is managed online and instantly. A user is only required to access the lending company’s website and answer a couple of essential inquiries about his/her personal and professional aspects.
Minimal documentation process
The greatest advantage to put in an application for an Instant Personal Loan is the privilege you get to upload the required documents online which saves a lot of your valuable time and paper. You don’t need to engage in paying visits to banks and completing long-winding documentations or handing over the same to a banking executive who arrives to collect it from you.
Fintechs offer you less demanding approaches to present your bank statements through either net banking or by online statement submission. The most fundamental documents like your ID verification and salary statements are everything that is required.
Self EMI calculation
This is a standout amongst the other solutions for especially “bad-at-math” people. When applying for a traditional personal loan through a bank, the officer may use some unknown algorithms and return to you with the EMI amount.
However, in case of an online personal loan, the lenders have an inbuilt online EMI calculator where you need to input your loan amount, salary, and exiting EMIs (if applicable). You can hence derive a personalized loan estimate comprised of the eligible loan amount, tenure and EMI, that is most suitable to meet your needs. Needless to mention, this online EMI calculator platform generates deductions that are absolutely transparent, precise and error-free.
Unsecured Personal Loans
As opposed to conventional personal loans, instant personal loans demand no declaration and attachment of any collateral. This implies that loans are approved relying on information professed by you about your income and the credit history and does not stand in need of a piece of a security deposit or a co-applicant.
Fast Loan Disbursal
Banks, almost always, set aside a long time in disbursing the loan to you, even after finishing the documentation and getting a loan sanction approval. This could be somewhere in the range of one to three weeks.
However, in case of instant loans, if every document is successfully submitted and approved online, you can be assured that your loan amount will be credited into your account within a period as fast as 24 hours.
Affordable interest rates, lower processing, and pre-closure charges
This shoves a load off your mind, particularly when you are already under the spell of a financial crisis and desperately trying to find a solution.
Online personal loans have no hidden charges. To a greater extent, the processing fees and foreclosure charges are much lesser as compared to traditional banking systems.