The fintech sector has exponentially grown over the last few years, making personal loans quicker and simpler to obtain. Unlike a decade ago when the application process involved several branch visits, hefty paperwork, and several days of the waiting period, today, one can immediately apply for an instant personal loan online while sitting in the comfort of their home. Simply visit a reputable NBFC’s website, study their terms and conditions, and fill out an online application form to get instant cash within a matter of minutes after approval. Online tools like EMI calculators help borrowers make better decisions and get the required funding without hassle.
While applying for a personal loan online is fast and convenient, a loan seeker must weigh the pros and cons before making the final choice. Here are a few benefits of applying for a loan online, along with their potential drawbacks.
Pros of Applying for a personal loan Online
Here are a few pros of online loan applications that make them a better choice:
Easy Comparison of Loan Plans
Loan comparison becomes a breeze with online personal loans. Most NBFCs let loan seekers check loan plans on their websites by entering some essential information. These are soft enquiries that do not affect their credit scores either. That means aspiring borrowers can easily shop around for the top loan deals various lending institutions offer and opt for one that best suits their financial requirements and repayment capacity.
Quick and Convenient
An instant personal loan online is as good as it gets in terms of convenience and speed. Applicants must fill out an online application form, fulfil the NBFC’s eligibility conditions, and provide a few details and documents to do it all online. These NBFCs typically have streamlined application procedures that the applicants can get through quickly. They provide complete instructions about how to apply for a personal loan online on their websites.
Many online NBFCs support a 100% digital loan process with speedy approvals and disbursals. The exact time frame varies by lending institution depending on their internal policies and verification procedures. Those looking to receive a loan as soon as possible must look for technologically-advanced NBFCs with quick loan processing systems. Some loan providers also provide a personal loan EMI calculator on their websites to help borrowers choose a repayment term suitable to their repayment capacities. Moreover, these loan providers do not ask applicants to visit their offices or submit hefty paperwork.
Access to More Options
Aspiring borrowers might find numerous online lending institutions out there, including ones that excel in particular areas. For instance, those looking for funds to cover wedding-related expenses can stick to a lending institution offering personal loans for weddings with no end-use restrictions. On the other hand, those approaching a brick-and-mortar lending institution have limited options available within their driving distance. That means choosing a loan plan from a smaller variety of offers, possibly an insufficient amount at a higher interest rate.
Easy Loan Management
Apart from application, approval, and disbursal, borrowers can also use the NBFC’s website to manage their loans online. They can also check their eligibility on the website’s personal loan section, use a personal loan EMI calculator to select a suitable loan term, chat with a customer representative, etc. That means borrowers can handle complete loan management by applying for an online loan through a reputable NBFC’s website.
Cons of Applying for a personal loan Online
Despite all advantages, applying for an instant personal loan online has some cons as well. These include the following:
Absence of a Face-to-Face Interaction
One of the biggest downsides of online loan applications is that the borrowers do not get an opportunity to have face-to-face interaction with the lending institution’s representatives. They simply visit a website, provide a few details and documents, and get the loan approved or rejected. However, if they visit a lending institution’s office physically, they can talk to real humans and explain the exact financial situation to them. Based on the negotiation, they could offer them a better deal with lower interest rates or higher loan sanctions. Even if an individual does not have the best credit score, approaching a lending institution personally can improve the chances of getting the best option.
Unwanted Communication from Lending Institutions
If a loan seeker compares offers from various lending institutions, they start receiving phone calls, emails, snail mails, etc., from the companies they approached. That could happen even after you borrow a loan from a different NBFC or drop the idea of applying for a loan altogether. Although one may contact the company and stop these communications, it is a bothersome and time-consuming process.
Complete Loan Management Online
Applicants who are not that tech-savvy may take someone’s help to compare and apply for an instant personal loan online, but the process continues. They also need help to use the website to track their application status, accept the loan offer, activate the e-mandate, pay loan EMIs, close the loan account at term end, etc. They may also need to contact the lending institution through email, chatbot, or social media in case of any queries or doubts. It can be a challenging task for someone without much internet-browsing habits.
Is an Online NBFC Better Than a Branch-Based Lending Institution?
Choosing between an online and offline loan provider largely depends on the borrower’s preferences. Those who like to meet a customer representative in person will feel more comfortable approaching a branch-based lending institution. However, loan seekers looking for the fastest possible funding at low-interest rates will find online NBFCs the best options.
For typical borrowers, online personal loans are excellent funding options they can obtain without leaving their houses. They are easy to shop for, convenient to apply, and have better interest rates and repayment terms. The cons of online lending institutions are very few and easily manageable with a little adjustment and internet adaptability. Applying for an instant personal loan online is a better choice in that scenario.