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    Looking to get touchless personal loan online? Here are key things to know

    Looking to get touchless personal loan online? Here are key things to know

    Looking to get touchless personal loan online? Here are key things to know
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    By Anshul   IST (Updated)

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    One key convenience provided by an online personal loan is that the borrower can complete the entire process in minutes on their mobile app.

    A personal loan available at a digital platform or on an app by lenders is known as a touchless personal loan. Also called an online personal loan, it requires minimal documentation and the loan amount is sanctioned in a lesser time.
    One key convenience provided 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 key things to know about a touchless personal loan:
    Who is eligible to get an online personal loan?
    According to Zafar Imam, CEO, FinShell, everyone who is eligible to get a normal personal loan is also eligible for online PL.
    "So, salaried employees working with a private limited company, public sector undertakings, or a self-employed person with a min income/turnover criteria are eligible for this loan," Imam said.
    The online personal loan eligibility, however, largely depends on the applicant's credit score or additional data that a person shares with the lender (if the credit score is not available).
    As per Anuj Kacker, co-founder, FREO, there are a few cases where additional/alternative information (like age, type of employment, professional experience, etc.) holds a higher ground, which allows online loan providers to go beyond the traditional lending processes.
    What kind of documents are required to avail of a personal loan online?
    While there are literally hundreds of types of personal loans available today, Prithvi Chandrasekhar, president, risk and analytics, InCred, said almost all of them require the same basic documents that can easily be digitised.
    "These are proof of identity and address (e.g. PAN card, Aadhar card, Driving License, Passport, etc.), proof of income (e.g. bank statement, Income Tax returns, etc.), and proof of employment (e.g. salary slips, employer ID card, etc.)," Chandrasekhar explains.
    What is the interest rate on online personal loans?
    The interest rates for online personal loans vary from one borrower to another, making them unique in nature. It makes no difference whether the borrower is online or offline.
    As per Kacker, a borrower having a really good score can secure a loan of 10-11 percent, while a borrower earning a moderate to high salary can get a loan of upwards of 15 percent, which can go all the way to 20 or 30 percent.
    Most of the lender uses a risk-based pricing model, according to Imam, which is largely based on the profile of the customer, income and repayment capacity, credit history, etc.
    When customers stuck while they process personal loans online?
    Chandrasekhar believes that most customers are able to navigate online processes smoothly. However, some customers don't have digital versions of income, residence, or employment proof documents at hand.
    "In these cases, they can scan and upload the traditional paper documents themselves. Many lenders have technology that allows them to read and consume these scanned documents as well," Chandrasekhar added.
    When loan process cannot be completed totally online?
    For digital lenders, especially app-based ones, Raghuvir Gakhar, CEO, CashBean tells that without digital verification, it's difficult for one to avail credit.
    "Our systems work in fast TAT principles and without the process being completely digital the exercise won't be fruitful for either us or the borrowing party. Hence for digital lending getting verification done online is imperative without which the loan will not be disbursed. At the same time, we also have our PV (phone verification) department which does a check on every new profile/applicant by calling them for certain oral verifications of borrower details," he explains.
    Additionally, there are a few processes like KYC, which can’t be entirely automated due to different requirements.
    "Though technologies like online Aadhaar verification, eKYC, and Video KYC have made it easier for the lending process to go 100 percent online, there still are a few obstacles that hinder KYC from going 100 percent digital. Some banking partners are fine with the KYC process being completed online, while others prefer not to," Kacker added.
    Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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