Personal Loans are a kind of unsecured loans where no collateral is needed to back them. These instant personal Loan are approved based on the applicant’s credit ratings, financial history, and the relationship between the applicant and the financial institution.
Personal loans are usually availed for immediate significant expenses or in times of financial emergencies. They have a flexible repayment period, and the loan tenure stretches from one year to five years. These loans also provide easy equated monthly instalments (EMIs) for repaying the loan. Being unsecured, personal loan interest rates are higher than secured loans.
Instant Paperless Personal Loans or Personal Loans Without Documents
With the advent of financial technology, going paperless is now the new trend. This has led to the banking process becoming streamlined and the invention of paperless personal loans or personal loans without documentation.
Digital lending platforms have led to minimum documentation, a lesser time frame for disbursement, and easier approvals. These paperless personal loans are approved through digital platforms wherein the lender and the borrower interact.
The personal loan interest rate, the loan tenure, and the EMIs are decided during that approval process. This removes the need for attested and photocopied documentation completely.
Ways To Get A Personal Loan Without Documents
- Have a good relationship with the lender: When an individual performs all financial and non-financial transactions through the same institutions, a rapport builds with the lender. This also allows the lender to judge the individual’s creditworthiness as the financial institution handles all the individual’s accounts. Thus, when an individual applies for a personal loan, it is easier to avail and agree to the personal loan interest rate, the loan tenure, and the other details.
- Good payment habits: Making payments regularly and timely, such as payments for credit cards that they hold with the bank, improves the borrower’s creditworthiness.
- Low debt to income ratio: The financial credibility of an individual can be determined through their debt to income ratio. The lower the ratio, the higher is the credibility of the individual. Ideally, for a loan to be approved, the debt to income ratio should be under 50 per cent.
- Maintaining a good credit score: When personal loans are approved without documents, the individual’s credit ratings become a significant factor in determining the loan approval. A good credit rating is an indicator of the financial credibility of an individual that the individual maintains a healthy debt repayment habit and manages his finances well.
- A lender offering instant loans: Choosing a lender with an instant approval feature for personal loans allows for minimal documentation.
Benefits of A Paperless Personal Loan
- The verification process becomes seamless because the documents are processed online, and the loan can be approved instantly.
- No collateral feature of a personal loan allows the borrower a hassle-free and less risky loan. This also lets the personal loan approval process go smoother and disbursed instantly.
- The efficiency of an online verification process is greater than the paper verification process.
- In these pandemic times, limiting physical interactions is very much necessary. Online personal loan processes and approvals have been a boon during these trying times.
Features of Paperless Personal Loans
- These loans are risk-free as no securities owned by the borrowers are linked with the loans.
- These loans are instant as all the process occurs online. The digital process replaced the analogue process, thereby quickening the pace and disbursing instant loans for immediate use.
- The process online catered to increase the borrower’s information security. Here, the borrower’s privacy is protected as the information can only be accessed upon their approval.
Thus, personal loan without documentation have made the lending-borrowing process smoother, hassle-free, secure, and instant. The dated method of paper documentation being replaced by modern digitisation has equally reduced the workload of both the borrower and the lender.