From the days of visiting your nearest Bank branch to transact on your bank account, with the advent of technology banking services are now available at the click of a button on your smartphone. While public sector banks in India have still to catch up, private sector banks offer a plethora of banking services to the average consumer.
Stemming from there getting a Loan has never been easier, with two of India’s leading private sector banks namely HDFC Bank and Axis Bank introducing instant personal loans. Unlike where you had to submit a substantial amount of paperwork at the time of making a loan application at a bank previously, with the introduction of this facility all it takes are a few clicks for the loan to be disbursed directly into your account held with the bank.
Let’s then take a quick look at the process:
- Log in to your bank’s net banking facility online, or via mobile banking on your smartphone
- Once the customer agrees to the terms and conditions, the loan amount is credited to their bank account
What are the features and benefits of this product?
- Being a paperless option, the facility is currently for a pre-approved loan amount for existing customers only
- In the event of an emergency, for instance a medical contingency, an individual need not run around to rustle up the funds
- There is no manual intervention in the process since the loan is approved and disbursed by automated systems, making the process transparent and hassle-free
- Individuals can carry out this transaction 24/7/365, at their convenience
While the process to avail of the loan has been made almost instant, remember that the product itself continues to be like any other loan product you may avail of from a bank branch. Hence, you as a borrower need to continue to repay EMIs on time, and thereby ensure that the loan is serviced well. Any default on the loan would have a direct impact on the Cibil score, as with other loans.
HDFC Bank has introduced this facility a little over a year ago, followed by Axis Bank subsequently. As per data released by HDFC Bank, in the financial year 2014-15, 63 percent of all transactions carried out at the Bank were via digital channels. This goes to show that paperless banking is likely to be the future, and the Indian banking industry is more than equipped for the same.
What’s interesting to note is that this facility is offered to those individuals with a good banking history; hence it becomes important to maintain a clean credit history. When banks process these applications, they either ping a credit bureau (such as CIBIL, Equifax, Experian or CRIF High Mark) for an individual’s credit-related information, or run an algorithm at their end which consists of this information. Either way, in order to avail of the loan at the most competitive rates, it is always prudent to ensure your credit score is good at all times.
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