Many of us now prefer to get everything right from appliances to books to clothes or even groceries at the click of the mouse. Keeping in tune with the trend of the times, the concept of online loans is catching on too.
While secured loans like home loans or vehicle loans are available online partially, personal loans, which come under the unsecured loan category, can be availed of completely online.
For secured loans, the initial application can be done online, when you will get to know details such as loan eligibility and interest rate. But the property documents and legal verifications happen offline.
There are two ways to start. One, you can go to the website of each individual bank or financial institution, provide the initial basic information and get to know your eligibility, interest rate offered, tenor and the quantum of the equated monthly instalment (EMI).
Otherwise, you can visit websites of loan aggregators. The advantage of using a loan aggregator is that you will get to know the list of institutions at one place, making the comparison and decision easier.
In both cases, the basic information that one has to provide initially are your name, employer details, net take home monthly salary, on-going loan EMI and mobile phone number. Based on your take home salary and other loans, if any, your eligibility will be calculated and the interest rate offered also displayed on the screen.
Once you decide on the institution that offers you the best rate and higher eligibility, the documentation involves uploading your address proof, identity proof, salary and bank account statements, PAN card copy etc.
Rakesh Makkar, Executive Vice President and Head – Business, Marketing and CSR, Fullerton India Credit Company Limited says “Providing your office identity card and visiting card will aid in making the verification process easier”.
If the documents are clean and clear, the loan can be sanctioned any where between 24 to 48 hours.
Since all the processes happens online, the loan approval will solely depend on the information and documents you upload.
So make sure to give correct documents in the first place to avoid the loan getting rejected.
On the other hand, a self-employed person will have to provide extra documentation pertaining to the business like the profit and loss statement, balance sheet and other business related documents.
“The process might also take a little more time as the lender may want to come and visit the business premise, office, and so on”, says Rakesh.
Pros and consGetting a loan in just within 48 hours is a major advantage of getting a loan online. Secondly, the best rate is offered instantly as there is no manual intervention. Rishi Mehra, Founder, Deal4Loans says, “If one goes to a branch, a representative may quote an interest rate of 20 per cent when you may want 17 per cent; finally, you may settle for 18.5 per cent after a series of negotiations.
But when looking online, the 18.5 per cent will be offered at first glance to avoid losing the customer.
The banks know that you are online and you are likely to look for other options in case the rate offered to you is high. It also reduces the possibility of miss-selling,” adds Rishi. Thirdly, online loans give the liberty of applying for them from anywhere and at any time.
Though online loans are convenient, ensure you have a secure connection.
Besides, you should be prepared to get continuous calls from the institutions offering loans as you will be providing your contact number during the initial process.