• Online vs. Offline Personal Loans: Which one Should you Choose

    The consumer lending industry has witnessed a significant change in recent times due to the advancement of technology. Most people now find it convenient to access financial products with the help of technology rather than using the traditional application process. Lenders now provide completely paperless loans through online applications. However, the offline method of personal loan application is not completely dead. There are still many people who prefer the old-school way of loan application by visiting the branch office of the lender.

    Let’s discuss the merits and shortcomings of both these application modes and which one is best suited for the new digital age consumer.

    Offline Personal Loans

    This is the traditional way of applying for a loan. Here, the applicant must visit the branch office and fill out the necessary forms to apply for a personal loan. All the KYC documents must be submitted in hard copies, and the company may take a lot of time to process these applications. One of the biggest merits of this process is the personalised service obtained when interacting with an official face-to-face. This is ideal for individuals who are not internet savvy. On the downside, this process is significantly slower than online loans. Moreover, the documentation involved in the application process can be extensive and overwhelming for some individuals.

    Online Personal Loans

    The digital age has enabled customers to opt for online personal loans with significant ease. Here, customers can apply for a loan from anywhere and get instant access to various loan products. Busy customers can save a lot of time through the online application process. If you are in need of instant funds, online is the best way to go as funds are disbursed immediately in this mode. The online method allows customers to choose a loan product of their preference rather than listening to the sales pitch of a bank official.

    Which One to Choose?

    Let’s do a quick comparison of these two methods to find out which one comes with a lot of advantages.

    Online personal loans Offline personal loans
    Convenience You can apply for these loans from anywhere at your own preference. You need to fix an appointment with the lender at a specific time and visit the office in order to apply.
    Documentation You can upload scanned copies of various KYC documents on the application portal and get your approval instantly. This is a paperwork-intensive process where you need to submit hard copies of your KYC documents at the branch office.
    Processing time Once the documents are uploaded, they are processed within a few hours and the applicant’s eligibility is established. Some lenders have started using Artificial Intelligence to make this process even quicker. The process time is significantly high as lenders need to physically verify the submitted documents and establish the credibility of the applicant.
    Comparison of products You can compare multiple loan products simultaneously through the information available online. This helps you choose the best loan product suitable for you. If you wish to compare offline products, you must visit the branch offices of all lenders and ask for their information.
    Charges The charges are provided clearly on the lender’s website and no additional charges are imposed during the loan process. Sometimes, offline loans may have some additional charges as they might involve commissions for agents.
    Security The personal data provided online is highly secure as most lenders follow best practices with regard to online security. The risk of losing crucial paperwork is imminent in the case of offline loans.

    Scope of Online Personal Loans in India

    Internet penetration in India is increasing every day even in tier 2 cities and rural areas. In most of these regions, offline loans are still popular as customers prefer face-to-face interactions over online applications. However, this scenario is rapidly changing with the advent of technology. The number of smartphone users in rural areas is increasing day by day. This also has a profound impact on the consumer lending industry. Hence, many industry experts predict that paperless loans are the future of consumer lending. In major cities across India, online loans are already popular among working professionals. This will soon be expanded to other parts of the country as well.


    When it comes to personal loans, there is no one-size-fits-all solution for everyone. While online personal loans are growing at a rapid pace, there are still many individuals in the market who need offline products. The ease associated with online personal loans cannot be matched by offline products. Hence, it is popular among working professionals in urban regions. Most lenders are now expanding their presence to other markets in India. In the future, it is likely that online loans will have a significant presence due to the expansion of the digital marketplace all over the country.

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