Digital lending in India is not in a nascent stage, as believed. With the shrinking gap between technology and traditional lending practices, the financial services industry is only going to profit from it. The access to data is now much easier as compared to before thanks to the advent of e-KYC, NACH and Internet Banking. Financial Technology or Fin-tech, stretches across applications such as payments, personal finance, lending and digital banking. Digital lending in India is growing rapidly, and recent reports indicate that India is the third largest alternate lending sector in the world after the US and China. There are close to a hundred well-funded startups in India working in this sector.
What is Digital Lending?
There are many hassles encountered by borrowers when applying for a personal loan with traditional lending institutions such as banks or moneylenders. Dossiers of paperwork, no clarity on approval status, delays with regards to documentation, etc. make it a herculean task to get funds in times of emergency. If there is no prior experience or history of credit, then banks reject the application outright.
Digital Lending is a lending solution which enables individuals to borrow funds sans the offline process of banks. Eligible salaried individuals are provided funds based on their credit worthiness.
The Need for Digital Lending
The ‘Digital India’ project swooped in at the right time to provide a lift to digital lending in India. With the combination of borrower data, algorithms and technology, the question arose as to what could be done with this trident to actually solve daily financial problems that was affecting India’s millennial generation. Financial Services are the largest digital contributor to the GDP. The idea is to have a simple platform that provides quick yet effective financial services with good value. There are more and more millennials ready to accept a digital outlook to solve their financial problems. The need for digital lending arises mainly due to the shortcomings in traditional lending solutions. Some factors that govern its rise are
Making use of technology certainly puts a digital lending platform in the driver’s seat. For loan processing there is a system required to check the documents, process the loan and disburse the approved loan amount. All these are done with the help of credit models that make use of borrower data. Digital lending allows for continuous upgrade of tools that are needed to make the loan experience faster and better.
Imagine not needing to travel from bank to bank with documents, photocopies and application forms. With digital lending, the documents can be retrieved from the borrower’s internet banking account or simple uploaded from the computer. The borrower’s credit report is fetched online, and helps a digital lending platform to provide collateral free personal loans. So, without actually seeing the borrower, the loan is approved and disbursed.
There is least human intervention involved with digital lending. There are no executives physically accepting your application form or your physical documents. Therefore, there is no chance of partial tampering of documents or unbiased loan decisions via the route of digital lending. Digital lending also shortens the credit assessment time.
The use a simple online application form, replaces the pile of exhaustive paperwork that could take-up an hour to fill-in along with references and signatures.
With traditional lending solutions taking up to 2-3 days to get the loan from approved to disbursal stage, a digital lending platform will do the same within 36 hours if the eligibility criteria is met.
Lending money is an activity that involves handling of sensitive borrower information including the financials. This makes it paramount to protect the data. There are occurrences reported of identity theft and website hacks that make us skeptical to depend solely on digital lending. But, the hallmark of a good digital lending platform is making use of SSL layers for encryption.
The Best Digital Lending Platform
Despite India’s digital lending sector still in growth phase, one Fin-tech player has managed to tread farther than others in the segment. We are talking about Seynse Technologies’ financial product, Loan Singh – A digital lending platform that serves the underserved salaried individuals.
Features of Loan Singh
Being a digital lending platform, Loan Singh embeds almost all of digital lending features. Some facets of Loan Singh are
- Automated underwriting using data modeling
- The time delay with banks has evaporated (Apps, internet and more…)
- Quick disbursement due to automated processes of assessment and lending
- Innovation is ensured thanks to better quality of customer service with chat bots, online chats, etc.
- The risks taken by Loan Singh are tremendous compared to banks. Here borrowers don’t have to physically apply for the loan. PAN details and Bank statement PDF is enough.
- Credit Risk (unsure of repayment), Market risk (unpredictability) and Operational risk (cyber-attack, technology outlay, etc.) are 3 risks that Loan Singh faces head-on & tackles while trying to serve the under-served.
- The traditional finance sector has always been a slow moving one. Digital lending uses “Speed” as a word for all its operations.
- Loan Singh prides itself on its technology, which automates processes and hence traditional lending solutions such as banks will need to take more time to shift from years of standard tedious practices like lengthy paperwork and long list of documents.
How to Apply for a Loan at Loan Singh
The process is simple and completely online. You need your PAN Card and latest 6 months bank statement. The statement has to be in PDF format only. You can apply for the personal loan by going to www.loansingh.com and clicking on ‘Start Your Loan Application’.
Get Started Page – Select ‘PERSONAL LOAN’ from the drop-down and enter the loan amount with the desired repayment tenure.
Registration page – Add your contact number, personal email ID and corporate email ID
Social Authorization – Connect your Facebook, Google+ and LinkedIn profiles for discounted rates
Profile Page – Fill in your name, gender, father’s name, number of dependents and PAN Details. We use your PAN Card Number to check your CIBIL Score and as a KYC document.
Address Page – Choose your type of residence; mention your street address, city, state and pin code.
Job Profile Page – Mention your current designation, total work experience, company name, highest qualification, last institution attended and monthly salary.
Financials page – Upload your latest 6 months bank statement from your computer or fetch from your GMail account or net-banking account.
Auto Debit Page – Provide permissions to your bank name, account number and IFSC code so that Loan Singh can auto debit the EMI amount from your account every month. This way you don’t need to set reminders or miss-out on any loan EMI repayments.
Advantages of Loan Singh
Loan Singh presents a number of advantages over other online platforms. Some of them are
- Minimal documentation
- Fixed monthly installments
- No hidden fees
- Easy online loan application process
- No prepayment penalty
- Social authorization – a secondary identifier
- Transparent process