How do Paperless Personal Loans Work?
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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.
Understanding the basics
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.
Let's get started
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.
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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