Youngistan is flocking to digital lending platforms

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Digital lending platforms are becoming increasingly popular with teens who are in dire need of money and prefer a paperless process for sharing documents.

“Until a few years ago, when lending was largely restricted to offline, the processes were paper-heavy and time-consuming. Today, digital lending through marketplaces offers a vastly improved consumer experience through easy access to information and products, ”said Naveen Kukreja, CEO and co-founder of Paisabazaar.com.

A marketplace acts as a central platform for borrowers to compare the interest rates of different banks and financial institutions to get the best loan offer.

“Initiatives like Aadhaar have created the perfect basis for technology and data innovations for digital players in order to offer consumers tailor-made credit products as well as extremely convenient and fast processes. This is vital with credit as consumers are often in dire need of cash, for example in the event of a medical emergency, ”adds Kukreja of Paisabazaar.com.

Tech-savvy youngsters are more inclined to digital lending platforms. “Today we can collect a lot of data from the source ourselves. PAN, Aadhaar can be verified online. So there is no chance of forged documents in the online case, ”says Navin Chandani, Chief Business Development Officer, BankBazaar.

Of the total applications received at the bank bazaar, 65 percent are for unsecured loans. A significant number of applicants choose the paperless option due to the faster turnaround time.

“Filling out an application form and scanning (documents) on the phone made it a lot easier. There will come a time when people won’t go to a bank anymore. Each NBFC will have its own online arm to serve its customers in the Amazon age, ”adds Chandani.

Types of online loans

In addition to the marketplaces, there are a number of online loan companies that offer unsecured and instant loans with no human interface to the customer. This includes unique products such as “lines of credit” and peer-to-peer (P2P) loans.

“Digital platform lending was close to zero up to four years ago, but today online lending accounts for about 15-20 percent of the total personal loan market and we hope it will grow to 50-60 percent in the next 3-4 years. “Believes Bala Parthasarathy, CEO and co-founder of MoneyTap.

MoneyTap offers the ability to take out multiple loans through a single “line of credit” from a bank or financial institution. The average interest rate is between 15 and 17 percent. The loans can be as small as Rs 2,000 to a maximum of Rs 5 lakh. The minimum term for a credit line is two months to 36 months.


Scope and scope of digital lending


“Every month around 15 lakh customers apply for a personal loan. Almost 15-18 percent of that comes online, ”says Satyam Kumar, Executive Director of LoanTap Financial Technologies.

“There are three main reasons people are making changes to online product customization, sales and the faster turnaround time. Millennials in particular are very popular

“Adds Kumar.

LoanTap offers personal loans, overdrafts and special loans with a term of one to five years at a monthly interest rate of 1.5 percent. The customer is never seen with “blood and flesh” during the loan process, as outsourced providers take care of the physical verification of the borrower.

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