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  • Paperless Personal Loans: A Green Approach to Consumer Lending

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  • A lot has changed in recent times regarding how consumers access their banking services. Most customers are now looking for quick and easy solutions to their banking needs rather than waiting for days. This has been made possible with the advent of digital marketplaces in the financial sector. The government is already doing its part to transform the economy into a digital one with a focus on building a cashless infrastructure. The paperless personal loans offered by various lenders is an example of how this industry is transforming.

    The digital age has made customers look for instant solutions to their financial needs. Personal loans offered by various lenders cater to these needs of customers and help them take care of their emergency financial needs. Many industry experts believe that the future of consumer lending is going to be completely paperless. Let's discuss the importance of paperless personal loans in transforming the lending industry.

    How Paperless Loans Work?

    With the advent of the Internet, financial institutions now find it extremely easy to accept and verify digital documents from potential borrowers. Customers no longer have to visit the branch office and complete the paperwork for a loan application. They can do this from anywhere and get their approval easily. The process is pretty much the same for all lenders in the market and the steps are given as follows:

    • Visit the official website of the lender.
    • Fill up the online application with your personal details.
    • Submit digital copies of all the necessary documents.
    • The bank will receive the documents and verify their validity.
    • If the documents are accepted, the loan amount is disbursed to the customer’s bank account.

    Documents Required

    Paperless personal loans are simple and easy to apply. However, the borrower must submit various documents to the company to successfully receive the loan amount. These documents are required to establish the applicant as a legitimate borrower who can repay the loan amount. Applicants must upload digital copies of these documents and let the company proceed with the verification process. With the advent of digital signature, customers can also e-sign their documents and the process is completely paperless. Some of the documents required for paperless personal loans are as follows:

    • Identity proof (PAN, Aadhar, Voter ID, etc.)
    • Address proof (Aadhar, Voter ID, Passport, utility bill, etc.)
    • Bank statements (digital copies of the latest bank statements downloaded from one’s net banking account)
    • Salary slips (Digital copies of payslips obtained from the employer)

    If you have hard copies of these documents, you can simply scan them and upload them in the application portal. The company will receive these documents and store them in a secure portal. The lender will scrutinize the validity of these documents during the processing stage.

    Advantages of Paperless Personal Loans

    There are several advantages to using the paperless approach to personal loans. Some of the key advantages are listed as follows:

    • No paperwork: Since the process is completely digital, customers no longer have to visit the branch office to submit their applications in hard copies. The tedious process associated with filling up multiple forms can be avoided in this process. All the other hassles of paperwork can be avoided when you use the paperless approach to personal loans.
    • Quick disbursal: The digital approach to personal loans has sped up the process significantly. Once the company has verified these documents, the loan amount will be disbursed instantly. If you are already a customer with the bank, you can also get access to pre-approved loans.
    • Eco-friendly approach: This is one of the main reasons why many companies are promoting the paperless approach. Since the process has gone completely digital, banks can save a lot of paper and follow an eco-friendly approach. In this way, you can reduce your carbon footprint and contribute to the environment.
    • Low costs: Lenders can reduce their overall costs by following the digital approach. The costs of paper and printing can be completely eliminated in this process. The savings obtained in this process can be transferred to customers.
    • High security: Most industry experts believe that the paperless process is a lot more secure than maintaining paper files. There is always the risk of losing key paper documents in the old process. This can be eliminated if the application and verification process become digitised.

    Paperless Loans through Mobile Applications

    Many lenders have now started using mobile applications to disburse loans to their customers. This helps them reach a wide range of customers in the market and cater to their needs. Customers can benefit from this approach by maintaining their loan accounts with the help of their smartphones. They can keep track of their loan amount and repayments with the help of these applications.

    Conclusion

    Paperless personal loans come with several advantages to both lenders and borrowers. Be it the cost or the quick disbursal process, personal loans have transformed significantly in recent days due to the digital approach. By eliminating the tedious process of paper filing, it is possible to save a lot of time and get the loan amount instantly. Most of the top banks in the country provide pre-approved loans to their existing customers. Since the customer profile is already available with these banks, pre-approved loans do not require any kind of paperwork. The ease of process involved in paperless loans have already become a big thing in India, and it is likely to grow even further in the future.

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