A few years ago, the lending process in India was cumbersome where one had to make multiple visits to the bank, stand in long queues, bring an endless number of documents and proofs for verification and then wait for weeks to hear from the bank.
Does it sound feasible in the busy times today?
In those days, getting an instant cash loan during a financial crunch was more like a dream for most borrowers.
Today, time holds more value than money and people are looking for options where loans can be applied without making visits to the lender’s office. Understanding the need of the hour, with the help of digitization, Fintech (Financial technology) companies have brought a revolutionary change in the lending system. Technological breakthroughs have paved the way to digital lending platforms which help people to apply for instant cash loans from the comfort of their homes with just a click. As per a report* shared by a leading daily, India recorded $1.77 billion in Fintech investments between the year 2014-15. Considering India’s economic growth, the Fintech market in India is expected to reach $2.4 billion by 2020.
Importance of Verification for Loan Approval
Personal loans are one of the most sought-after loans when it comes to availing a loan for unforeseen expenses, for example, a medical emergency, house renovation, car breakdown, etc. The online lending companies have given a new approach to personal loans by providing customers easy and hassle-free application process and quick disbursals. These loans are ‘unsecured loans’ which means they do not require a collateral. And this is exactly why personal loans require a strict verification process.
It is imperative for lenders to follow a strict verification to minimize the risk of money laundering, identity thefts, signature forgery and other financial frauds. Online finance providers need to check and verify the following conditions of a borrower before sanctioning a loan:
- The present financial condition
- The previous repayment history
- The present income
- The credit score
In today’s time, everybody needs an instant cash loan. They don’t want to get into the hassle of paying multiple visits to banks to verify their documents which is why online finance providers are continuously working on their technology to come up with options which can help in quick disbursal of loans.
Since verification holds one of the most important steps in the disbursal of a personal loan, online finance providers have launched E-KYC (Electronic Know Your Customer) that allows paperless and quick verification. The verification process that used to take weeks in earlier days, now just takes minutes with E-KYC. E-KYC links your KYC with Aadhaar card which helps to authenticate your identity through one ID. (Read more: Why Having an Aadhaar is Important?) .This has completely eliminated the strenuous task of making multiple visits to the bank with numerous documents and waiting for weeks to hear for approval.
Tips to follow for a successful verification of loan:
- It is important to meet the eligibility criteria that have been set by the online finance providers ( age, income, occupation, credit history)
- Try to maintain a good credit score because this will improve your chances of loan approval. A good credit score might also improve your chances of availing some attractive offers from the lenders.
- Apply from a particular lender only. Applying for loans with multiple online lenders can have a negative impact on your credit score.
- Provide factual information- address proof, income and credit history. It is important to give correct information because it gets verified by the lender
- Apply for a loan amount that is under your repayment ability. Applying for an unreasonably huge amount can have a negative impact on your application.
- Disclose only reliable facts. Don’t over or under-report your income or any other information. Report accurate information will help you get a loan that fits your needs and can be paid by you.
- You need to show that you have a steady source of income so that the lender is reassured that you can repay the loan on time.
Home Credit has sophisticated software to check and verify the documents and disburse the approved loans to the consumers instantly in their bank accounts. This has helped both lenders and consumers in quick approval and disbursal of loans.
With the help of world class software solutions and growth of digital lending, instant loan disbursal will help millions of consumers fulfil their needs by applying and getting loans from the ease of their homes with just a few clicks which means applying for loans will be as simple as doing online shopping.