The emergence of Fintech has significantly boosted financial inclusion in the country. Powered by cutting-edge technology and seamless digital experiences, financial services can be easily accessed anytime, anywhere by simply using a smartphone.

One of the products that are gaining popularity with individuals is the fully digital personal loan.

More than 70% of official credit offered by banks in India is granted to less than 10% of the wealthiest Indians. The middle class, namely those earning less than Rs 50,000 per year, is the most underserved class. Either they are ineligible for a bank loan due to strict credit score and income requirements, or the harsh process involving a long list of documents and paperwork makes accessing credit difficult. Timely use is a distant dream. For emergency situations, this is very frustrating.

This is where Fintech companies come in and allow people to borrow money with a fully digital process, providing almost instant disbursement! Users can get a loan by downloading a loan app on their smartphone instead of running from one pillar to another or contacting a banker. Thanks to technology, various processes such as credit assessment, document verification, and repayment (setup automatic debit) have made online loans easier and faster. Fintech has also opened up opportunities for other financial services, ranging from banking, investment, insurance and postpaid solutions. Let’s take a closer look at how digital loans save time and effort:

Flexible loan amount

Requirements for a personal loan vary among people applying for a loan online. As a result, digital platforms allow people to borrow as small as Rs 5,000, which can go up to Rs 50,000 depending on their needs and conditions.

Faster Eligibility Check

Checking loan eligibility is extremely easy on the digital platform. Machine learning and risk assessment models determine if you qualify for a loan in just two minutes using just one app.

Ease of Documentation and Verification – Nowadays documents can be verified online in seconds through different modes available like cKYC, Digilocker. The emergence of API-based solutions facilitates real-time photo/revenue verification, greatly reducing approval times.

Instant Disbursement

Unlike the traditional loan method, which requires weeks of paperwork and multiple visits to the bank, online loans are approved and disbursed almost instantly, within minutes if your documents are in good condition.

Fully personalized refunds

While traditional banks have limits on the duration and size of bonds, fintech companies offer more flexibility in choosing good repayment plans from a few months to 60 months. This helps to ensure the solvency of the loan to the user without incurring any additional financial burden.

Graduation-based approach

Often people with no or poor credit history will be denied loans/other credit products. However, fintech does not discriminate against them. Users can get a credit product (small:
5K-10K). When users maintain good repayment behavior, not only their credit score improves, but they can also be approved for better offers or new products in the future.