Want personal loan? No physical paperwork required! See what fintechs are offering borrowers

Those days have long gone when a potential borrower needed to take care a host of paperwork while applying for personal loans. A loan is disbursed by a bank only after looking into past bank account performances, credit score, salaries, age and tenures of the borrower. These checkpoints reveal the ability of a borrower to repay the debt amount. However, the process is lengthy, as you need physical proofs like photocopy, Aadhaar card, PAN card, salary statements and address proof. Apart from this, we also have to file a long list of papers providing various information as per bank guidelines. But this is not the case now! India has moved further towards digitisation or cashless economy. Now there are many fintech lenders who provide personal loans by eliminating physical paperwork. Personal loans are generally unsecured types of loans, and are opted for meeting current financial needs. 

Talking about fintech lenders, Aditya Kumar, Founder & CEO Qbera.com said, “Fintech lenders have changed the way personal loans work in several ways. Limiting, and in some cases completely eliminating the need for physical paperwork is one of the hallmarks of the “smart” process that these companies have adopted. Yes, you don’t need to deal with cumbersome and annoying physical paperwork anymore. Thanks do digital verification techniques, the need for physical paperwork has seen its end, and a new age of paperless loans has emerged.”

The verification process – What exactly happens?

If you want to apply for a personal loan, you’ll have to provide details so that lenders can evaluate your creditworthiness – the most important details are your PAN and Aadhaar. Using your KYC information (PAN and Aadhaar), your credit report is pulled from the credit bureau - this process is called the “hard pull”, and every hard pull that has been carried out in the past is mentioned in your credit report. 

Your main credit parameters – your credit score and repayment history – are instantly assessed by an algorithm, and your eligibility is almost immediately determined.
If your profile meets the lender’s underwriting norms, you will receive approval within seconds, and you can go ahead and complete the remainder of your application. Fintech lenders give you the provision of uploading your documents (salary slips and bank statements) online – either through a mobile application or a website. The documents are verified, following which a final loan offer is sent to your registered email ID. 

For small-ticket loans, the process doesn’t generally involve a loan offer. Thanks to e-KYC, you can digitally sign your loan agreement through your Aadhaar details and Aadhaar-linked mobile number; and much before long, you will receive your loan amount!

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Kumar said, “Well, it almost seemed like physical paperwork was indispensable – until the emergence of digital verification methods. As a matter of fact, times have changed quite dramatically – digital verification of not just a consumer’s documents but also other aspects of his/her credit profile has almost completely eliminated the necessity of physical paperwork.”

A stand out feature of personal loans offered by Fintech companies is the minimal turnaround time. Personal loans offered by banks and traditional financial institutions often took 7-8 business days to be disbursed. Kumar says, “Thanks to Fintech lenders, the turnaround time for unsecured personal loans has been reduced to a mere 24 hours! It must be mentioned that digital verification has been a significant contributor in bringing down the turnaround time for smart loans offered by popular Fintech companies.”

Hence, Kumar added, “As a matter of fact, times have changed quite dramatically – digital verification of not just a consumer’s documents but also other aspects of his/her credit profile has almost completely eliminated the necessity of physical paperwork.”