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In 2016, the government not only demonetized the economy, but also declared its intention of digitalizing it and making it completely ‘paperless'. Digitalization has already led to the ‘paperless personal loan'. This post will help provide an overview on these loans and how they function.
What is a Paperless Personal Loan?
A paperless loan is a type of instant personal loan that does not require any physical documents to be submitted by the borrower. With the advancement of technology, it has become possible for lenders to offer loans without any paperwork involved. This means that borrowers can now apply for a loan and receive funds entirely online. Paperless loans are also sometimes referred to as digital loans or e-loans.
Thanks to the digital drive led by the current government, more banks and financial institutions are using technology to accept digital loan proposals and even sanctioning them digitally, thereby completely eliminating any kind of paperwork. Due to this, customers can seek loans and get their loans sanctioned as per their comfort and convenience.
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Benefits of a Paperless Personal Loan
When it comes to the benefits of going paperless for a personal loan, let's take a closer look at what sets it apart:
Convenience: As mentioned earlier, paperless loans offer convenience to borrowers as they can apply for a loan and submit all necessary documents online. This eliminates the need to visit a physical branch or send documents through mail, saving time and effort.
Speed: With traditional loans, it could take days or even weeks for the application process to be completed. However, with paperless loans, borrowers can receive a decision and funds much faster, sometimes within 24 hours.
Environmentally friendly: Paperless loans have a positive impact on the environment as they reduce paper waste. In traditional loans, a large amount of paper is used for documents, which contributes to deforestation and pollution.
Lower costs: Since there is no need for physical documents and in-person appointments, paperless loans can be more cost-effective for both the lender and borrower. This could result in lower interest rates and fees for borrowers.
Accessibility: Paperless loans make it easier for individuals who may not have access to traditional banking services due to geographical or physical limitations. With online applications, they can easily apply for a loan from anywhere with an internet connection.
Security: Paperless loans use secure online platforms for document submission and processing, reducing the risk of sensitive information being lost or stolen.
How to Get Paperless Personal Loan?
Nowadays, for paperless personal loan, all you have to do is fill up and submit an online loan application form. When you do this, you are also required to attach soft copies of all the necessary documents that the bank or financial institution may ask of you for the purpose of evaluating your eligibility and credit worthiness in terms of your ability to repay the loan. Once you submit your digital application, it is received by the bank along with your documents. The bank scrutinizes these documents, based on which it approves your loan and credits your account with the desired loan amount.
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Stay safe. Stay aware
Clearly, paperless loans are here to stay. However, when you seek such loans, you must readand understand all the terms and conditions pertaining to your loan very carefully. Make sure that you comprehend them all and check for hidden costs and terms if any. Also, compare the loan proposal with those offered by different banks and check their repayment structure as well as any fees and charges, particularly in case of foreclosure. This will protect you and help you to avoid any negative surprises.
It is always a good practice to keep scanned soft copies of all your financial documents ready – like your PAN Card, Aadhaar Card, address proof, Form 16 or IT returns, and your bank statements. Then, applying for these loans becomes even more hassle free.
So from today go digital! Go paperless!
Disclaimer: Copyright Kotak Mahindra Bank Ltd.
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