Personal loans are used to arrange funds for a variety of purposes including going on a holiday, higher education, starting a business or for a medical emergency.
They can be easily obtained, have fewer eligibility criteria, minimal documentation and are unsecured in nature, which makes it a go-to option for many.
With the emergence of FinTech, getting a personal personal loan become a lot easier due to the online process, from the loan application, approval, disbursal to loan repayments. The borrower doesn’t need to visit the branch office of the lender anymore.
But, before applying for a personal loan from an online lender, you should know the pros and cons of an online personal loan application process.
- Easy Comparison of Loans
Compared to the offline process, online lenders allow you to compare the terms of the loan with other online lenders easily, that will help you to get better terms and the best rate on the loan.
It helps to quickly sort out the lenders based on your financial suitability and desired loan amount at the click of the button.
Also, using a personal loan EMI calculator, you can calculate your monthly EMI amount and then select a suitable tenure, so that you can easily manage your expenses and other monthly obligations.
- Hassle-free Application Process
You can easily fill the personal loan application form online and upload the documents for verification, which eliminates the hassle of extensive paperwork. This enables you to complete the process at your own pace, from the comfort of your home, anytime and anywhere. This way is environment-friendly too, as it cuts down the use of paper. For lenders, the online application process helps to track details of loan applications and application status easily.
Furthermore, you can track the personal loan application status online, fetch all the required information such as outstanding balance, tenure, rate of interest and many more.
- Instant Decisioning
In either process, you cannot apply to different lenders at the same time just to understand and compare offers as it affects your credit score. Also, through an offline process, it may well be a couple of days until you can get to know if your application will even be processed further based on your eligibility.
On the other hand, when you apply for a personal loan online with SMFG India Credit, as soon as you complete entering the details, uploading the documents and submitting the form, you will be instantly informed of your eligibility and whether or not your application will be processed further.
- Faster Approval
The entire lending process is much quicker as the verification and approval process are all managed digitally which reduces the time taken to disburse the loan amount. If you meet all the eligibility criteria and submit all the required documents, then you can even get the funds credited into your account within the same business day or next day.
Must Read: 5 Features of SMFG India Credit Personal Loan App that Make it Popular
- Difficult to Trust
Online-only lenders are difficult to trust due to their opaque nature of operations and lack of physical presence. And, scams around online personal loan app have further put a question mark on the reliability of taking a personal loan from online-only lenders.
- Hidden Terms
As the complete process is completed online, there are chances that the lender doesn't communicate the complete terms and conditions of the loan. You may also miss checking the fine prints of the loan documents before committing on the terms.
Should you Take a Personal Loan from an Online Lender?
It depends on the legitimacy and legality of the online lender. Any entity engaged in the business of lending and accepting deposits to the public in India is required to be registered with the Reserve Bank of India and other competent authorities. Similarly, a personal loan app should be recognised by the RBI or should be affiliated to a bank / NBFC which is in turn, recognised by the RBI.