Just a few years ago, getting a personal loan was a stressful assignment.
One could have obtained a personal loan from the local moneylenders. However, the local lenders charged an enormous personal loan interest rate. Moreover, the penalty was absurd. Many lost their lives for not being able to repay the local money lenders on time.
Financial institutions came into the picture to overcome these situations with the local moneylenders and the harassment associated. Financial institutions made several policies that helped individuals to obtain personal loans. However, the personal loan from the traditional banks had their problems:
- Processing Time
The traditional banks took weeks and even months to process the personal loans. The applicant had to make multiple visits to the bank branches to get their loan amount processed.
The traditional lenders needed an entire set of documents to evaluate the identity, address and creditworthiness. The documentation requirement eluded potential loan seekers as they did not have the documents like income tax returns, form 16 and property papers.
The seekers of the personal loan needed a guarantor who typically had a banking relationship with the lender. Since very few had access to a guarantor, the traditional banks sanctioned personal loans only for a select few.
The traditional lenders also needed collateral or security like property papers, fixed deposits, shares or other investments to pledge against the personal loan.
The online personal loan changed the entire financial industry as it did away with the lacunas in the old lending space. Here are some radical changes that came with online personal loans.
- Processing Time
The online personal loan processing takes days instead of weeks and months. As the entire process is online, an applicant could furnish all proofs acceptable to the automated mechanisms and get the loan sanctioned within the same day itself. On average, it takes 3-4 days to process a personal loan application.
The traditional lenders depend upon guarantors, collaterals and documentation to evaluate the creditworthiness. The online loan providers assess the creditworthiness using credit data accessible with the credit profile and bank statement.
The new-age personal loan providers need an identity and address proof to sanction the loan. After sanction, one needs to sign or e-sign an agreement with a small set of documents as per the regulations.
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Gone are the days where one had to wait for weeks and travel to lenders branches multiple times. Today sitting at home, one can apply and compare the loan offers from the top lenders. LoansJagat is India’s leading platform that helps individuals to avail instant and online personal loans. Visit LoansJagat now.