Technology is transforming the way money moves in the global economy. It has made finance more inclusive and easier to access for the masses. With the help of the right technology, banks and other financial institutions have improved their processes so they can serve their customers faster and better. An essential aspect of financial services is loans. And technology has made loan applications and approvals quicker than ever before.
In this article, we will talk about personal loans and the top five things technology has done to simplify the personal loan process. Before the digital revolution, applying for a personal loan meant endless paperwork, tedious bureaucratic processes, and a long wait for approval. All that has changed thanks to emerging technologies like artificial intelligence, machine-learning, and data science.
Here are five ways in which technology has changed how we apply for personal loans:
1. Finding a Suitable Lender is Easy
Finding a lender, let alone a suitable one, was a tough nut to crack in the personal loan market just a few decades ago. But with the advent of instant personal loan apps, it is simple to find a suitable lender. You need to scan the app to understand the terms and rates of interest offered by the different lenders, and you are all set. You can also find many websites that compare different banks and financial institutions to see who can offer the best rates and terms on a personal loan based on your eligibility.
2. Customizable EMI
Customize your payback plan based on your income and financial priorities. Technology has enabled banks, money lenders, and financial institutions to design customer-centric loan products. It enables customers to choose how much they wish to borrow, when to borrow it, and when/how they would like to pay it back. Your loan approval is based on your eligibility and your choice of repayment plan.
3. Instant Verification of Documents
Applying for a personal loan online gives you the convenience of instant verification of documents. The personal loan app will ask you to upload documents such as PAN Card, Aadhaar Card, income tax returns, bank account statement and other requisite documents for verification. With the help of automation, document verification is quick and easy, unlike manual verification, which takes many days, sometimes even weeks, to complete.
4. Fast Loan Approval
Risk-assessment algorithms have made it possible for money lenders to check your credit information and history within minutes. It enables banks and financial institutions to find creditworthy applicants with ease. On the other hand, eligible candidates can now get quicker approval for loans. It makes the entire process paperless and convenient for customers and lenders.
5. Flexible Interactions with your Loan Provider
Thanks to technology, now loan terms are flexible and accommodating to the borrower’s needs. Pay your EMIs online or offline through cash or cheques. You can choose between bank transfers, mobile wallets, UPI payments, and even auto-debit facilities. Not only that, you get flexibility in many loan terms, such as principal amount, tenure, personal loan, interest rates, and much more.
Fintech has touched our lives in many ways, and now we have convenient new ways to manage our finances –personal and business. Similarly, personal loans are also evolving with newer and better technological solutions. Banks and other financial institutions now offer customizable loan options that empower you to finance your dreams in the way that suits you best. With quick approvals, efficient processing, and paperless customer journeys, technology has made personal loans one of the best sources of funds for small business and all others in the market today.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics.