Digital Personal Loans are online personal loans wherein the entire loan processing, right from loan application to loan closure, is done through digital means. This prevents lengthy paperwork, saves a lot of time and disburses money within a few hours or a few minutes. The digital loan processing includes online application, video KYC, online document submission and verification, and quick loan disbursal. Lenders offering pre-approved personal loans offer instant loan disbursal with zero documentation.
On the contrary, traditional lenders follow manual loan processing and verification process which is lengthy as well as time consuming. Also, the loan application and document submission has to be done offline by physically visiting the bank branch.
Let us have a look at the differences between digital and traditional personal loans and know which is a better option.
Online vs Offline Personal Loans- Key Differences
Faster Processing
Personal loans applied through digital lending platforms are quick, hassle-free and can be applied from anywhere without even visiting the bank branch. The loan approval and disbursal takes only a few hours to few minutes. On the contrary, traditional lending platforms may take 2-7 working days for processing the loan application.
Most financial marketplaces like Paisabazaar offer a seamless digital platform for easy personal loan application. Individuals can visit Paisabazaar website or download Paisabazaar app and check for curated personal loan offers from multiple lenders as per their eligibility and loan requirements, all in a single click.
Minimum Documentation
Digital loan applications require only a few important documents such as PAN card, Aadhar card for video KYC. Unlike traditional loan applications, the document submission and verification is completely online. This speeds up the entire loan process and the loan disbursal is faster.
Loans for New-to-credit Customers
Unlike traditional lenders, most digital lending platforms offer personal loans to new-to-credit customers or applicants having a poor credit profile or those having no income profile. However, they are usually offered higher interest rates due to high credit risk.
Conclusion
Thus we see, how digital lending platforms have brought a revolution in Indian banking system. Digital personal loans are time saving, convenient, more accessible and have far more advantages over the traditional loans. Many traditional lenders have also switched to digital lending where they follow both online and offline means for lending. Individuals can opt for digital or traditional lenders as per their preferences and financial obligations.
