Should I apply for a personal loan online or not? To find
When everything – from groceries to gadgets – is available online, why should credit be far behind? However, are online loans a good option for you?
A sudden cash crunch can strike anyone’s life out of the blue. At times like these, all you need is quick, hassle-free access to credit. Armed with your smartphone, you search for a quick credit option and before you know it, you come across dozens of online platforms promising to provide loans, each promising you approval within minutes. , easy installments and convenient repayment terms. But how do you know which is the best deal, or are online loans a good option in the first place or not? Let’s dig deeper for answers.
1. Easy online loan options
First, when everything from groceries to gadgets is available online, why should credit be far behind? So, in step with modern times, banks and other financial institutions offer dozens of online financial products for you to choose from. However, the trust factor comes into play when accessing credit online. If a personal loan is guaranteed by a trusted commercial bank in India, you can be assured of its credibility.
So what are the benefits of accessing loans online? Here they are:
# Convenience: Needless to say, one of the main reasons to consider online loans is the convenience factor. The documentation for these loans is kept to a minimum. If you have the documents at hand, you literally apply for a personal loan in minutes, by uploading the necessary documents. You can do this from the comfort of your home or office, without having to go to a bank branch.
# Fast intervention : Online personal loans offer on their main USP a fast turnaround time. Not only do you get instant approval, but the money arrives in your savings account within hours. Therefore, if you find yourself faced with an emergency that requires you to immediately disburse a certain amount, an online loan can immediately come to your rescue.
2. Does your CIBIL score matter?
However, if it all sounds too good to be true and you think accessing credit online from banks is the easiest thing to do, hang in there a bit before you rush to apply. As a borrower, you should be aware that potential lenders pay close attention to your CIBIL score when assessing your creditworthiness. So, if you have a low CIBIL score, your loan application may not be approved.
3. Atypical credit score
The other advantage of borrowing from such lenders is that they do not rely solely on traditional parameters for loans and consider other atypical parameters for loans. For example, a P2P lender may consider your social media footprint from professional networking sites to assess your current career position and prospects for career advancement.
Based on other such atypical parameters to assess your financial situation, they determine your solvency. In such assessments, the CIBIL score may be given less importance when calculating your eligibility, depending on the risk appetite of the lender.
That said, it is prudent to maintain a good CIBIL score to gain access to timely credit at competitive interest rates. A good credit rating is a measure of a person’s financial health. Just as maintaining your physical health, with regular exercise and diet, maintaining your financial health is just as important with good credit habits.
(By Ajit Venugopalan, Managing Director, SVC Co-Operative Bank)