Digital Loan: Online loan application increased, know advantages and disadvantages of online application
In the era of digitization, now people are doing all kinds of banking transactions online from the comfort of their homes instead of going to the bank. Since the covid epidemic, the number of online loan borrowers has increased. Most people are preferring online loans with ease and time saving.
The traditional way of loan applications involves a lot of paperwork and possibly multiple visits to the bank.
Apart from this several check points are also involved in this process and all documents are physically verified. As a result, many loan cases are unnecessarily delayed. It also makes monitoring and tracking the state of the application difficult. This problem has fueled the adoption of digital home loan options by consumers in India.Digital home loans remove the loopholes to a great extent and make the process more transparent and easy.
Almost all major banks provide digital loan facilities. These include SBI, HDFC, PNB, ICICI, Bank of India and other banks. These banks have also created dedicated loan desks to provide quick loans to customers, such as the HDFC Bank Quick Loan Service. Banks digitally provide other types of loans to customers including home loans, auto loans and personal loans.
Pramod Kathuria, founder and CEO of Egilon, explains that the Egilon tech platform is changing banks’ traditional processes to make them more efficient with faster turnaround times.
These include digital on-boarding of customers, customer profile based match making tools, digital archiving of documents and instant credit analysis using IP algorithms. He said that with the digitization of the process, we have been able to give pre-approval within 5 minutes. The customer’s file is then sent to the banks for final approval and loan disbursement. It is claimed that the EasyLoan IP tech platform provides a platform for interaction between home loan borrowers, real estate developers and borrowers in a secure and trusted environment.
Disadvantages of Digital Loan Application
The advantage of applying for a loan through digital mode is seen in the form of quick release of the loan amount, but, in such cases, the customers are charged a heavy rate of interest, which may be many times higher than normal.
On the other hand, in the case of loans availed from digital loan applications, if even one installment is delayed, the customer may have to pay a huge amount as penalty. At the same time, platforms providing instant loans are mostly unregistered and in such cases the customer may also become a victim of fraud or face losses in some other way.