A personal loan (PL) available at a digital platform or on an app by lenders is known as digital loan. Also called an online personal loan, the loan amount in this case is sanctioned in a lesser time. However, the procedure is complete only when the document verification is successful. Hence, maintaining proper documentation is crucial for a smooth process.
Live TV
Loading...
The eligibility
Everyone who is eligible to get a normal personal loan is also eligible for online PL. So, salaried employees working with a private limited company, public sector undertakings, or a self-employed person with a minimum income/turnover criteria are eligible for this loan.
The online personal loan eligibility, however, largely depends on the applicant's credit score or additional data that a person shares with the lender (if the credit score is not available). There are a few cases where additional/alternative information (like age, type of employment, professional experience, etc.) holds a higher ground, which allows online loan providers to go beyond the traditional lending processes.
Importance of documents
Having all the necessary paperwork readily available can expedite the loan approval process and prevent unnecessary delays, rejections, or requests for additional documents.
"Well-organized documentation also helps borrowers to provide accurate information, minimizing the risk of errors and ensuring transparency. Ultimately, being diligent with the documentation increases the chances of securing a personal loan with favorable terms and conditions, making it an essential step in obtaining financial assistance," said Sidharth V, CRO at KreditBee, an online personal loan app.
Here are some of the documents necessary for smooth application process of digital loan:
Identity proof
When applying for a loan, borrowers are required to provide a valid identification proof document to establish identity.
"The specific documents accepted may vary depending on the country and the lender's requirements. Some valid ID proofs are Pan card, Voter ID card, driving license and Aadhaar card," said Sidharth.
Address proof
Along with an ID proof, lenders also require valid address proof in order to process the loan application. Some valid address proofs are passport, Voter ID card, driving license, and Aadhaar card.
Income proof
Borrowers should also include the latest salary slip or any document that shows income, such as a salary certificate or bank statement showing regular salary credits.
"This documentation verifies the applicant's financial stability, enabling lenders to determine their credit limit along with their ability to repay," said Anil Pinapala, CEO and Founder, FlexPay by Vivifi, an instant personal loan app.
Signature proof
A digital signature, also known as e-sign, is required to create a legally binding agreement between the applicant and the lender. It ensures mutual consent and compliance with regulatory requirements.
Current personal loan interest rates of banks
Bank | Interest Rate (p.a.) | Processing Fee |
HDFC Bank | 10.5% p.a. - 21.00% p.a. | Up to 2.50% |
ICICI Bank | 10.75% p.a. - 19.00% p.a. | Up to 2.50% |
TurboLoan Powered by Chola | 15% - 21% (fixed) p.a. | 3.00% |
Yes Bank | 10.99% p.a. onwards - 20% p.a. | Up to 2% |
Kotak Mahindra Bank | 10.99% and above | Up to 3% |
Axis Bank | 10.49% p.a.- 22% p.a. | Upto 2% of the loan amount |
IndusInd Bank | 10.25% p.a. - 27% p.a. | 3% onwards |
HSBC Bank | 9.99% p.a. - 16.00% p.a. | Up to 2% |
IDFC First Bank | 10.49% p.a. onwards | Up to 3.5% |
Tata Capital | 10.99% onwards | Up to 3% |
Home Credit Cash Loan | 24% p.a. - 49.5% p.a. | 2.5%-5% |
Ujjivan Small Finance Bank | At the discretion of the bank | At the discretion of the bank |
Aditya Birla Capital | 14% p.a. -26% p.a. | Up to 2% |
State Bank of India | 11% p.a. - 14% p.a. | Up to 1.50% |
Karnataka Bank | 14.23% | At the discretion of the bank |
Bank of Baroda | 10.90% p.a. - 18.25% p.a. | Up to 2% |
(Source: Bankbazaar)
First Published: Aug 4, 2023 12:43 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Prajwal Revanna's father in custody for alleged kidnapping and sexual abuse
May 4, 2024 7:53 PM
Delhi, Indore, Surat and Banswara — why these are the most challenging domains for Congress internally
May 4, 2024 1:53 PM
Congress nominee from Puri Lok Sabha seat withdraws, citing no funds from party
May 4, 2024 12:00 PM
Lok Sabha Polls '24 | Rahul Gandhi in Rae Bareli, why not Amethi
May 4, 2024 9:43 AM