Digital lending is a process of completing loan application online. This platform allows lenders and borrowers to lend money through digital or paperless means. With this technology advancement, you can easily apply for the loans using your Laptops or smartphones and get the money disbursed into your bank account. You need not to visit any bank or financial institution for your loan process or submission of documents.
This has simplified the process of borrowing which has resulted into improved customer experience and reduced overall costs. End to end process of loan application is done online via web forms or mobile phones. Digital technology is used to manage all the steps involved in the loan process from application submission to Document management, electronic signatures, Credit analysis and final decision making. This gradual move from traditional lending to digital lending has many benefits which are explained below:
The Benefits of Digital Lending:
Capturing Applicant Details: With digitization, borrowers can apply from any location at any given time. There is no location barrier while applying for the loan online. These platforms offer customized user experience where borrower can easily enter their details and complete the loan application process online.
Loan Underwriting Process: All banks or financial institutions use underwriting skills for the final decision. Digital platform allows the users to submit all his details where there is no manual intervention. Automotive technology is used to apply decision rules to determine if a borrower’s loan application at acceptable risk.
Quick Final Decisioning: In traditional lending, applicant must wait for the loan approval. Now a days, with digital lending quick decision happens for borrower’s loan application. Delay in final decision or loan application process can deviate the lender’s interest to competitor. Even the loan disbursement also happens on the same day.
Allows Borrower’s with no credit history to apply for loans easily: Traditional lending relies on credit score where final approval depends on borrower’s score. So, if an individual is applying for a loan and does not have a credit score history, chances of approval are very low. However, with digital lending, even first-time borrowers can also easily enjoy access to loans.
In the current commercial lending market, there are many software applications that serve the loan origination and credit assessment requirements of traditional and non-traditional lenders. Financial institutions are increasingly working on improving their efficiency, final decision, productivity which in turn enhances the customer experience.
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