How To Obtain a Personal Loan Without Going to A Bank?

With the rise of instant loans online, it is now easier to get credit for urgent requirements. Digital online loans have transformed the personal loan category, eliminating the need for you to go to the bank anymore. You only need an internet connection and a mobile device to get funds for your financial needs. The popularity of digital lending is visible through reports highlighting growth of 22% CAGR (compounded annual growth rate) in the segment. A whopping 86.3% or $2.8 billion between 2014 and Q2 2023 was also disbursed by startups providing personal loans in the digital consumer lending category.

On that note, here is a closer look at how you can get a personal loan without visiting the bank.

Ways To Obtain a Personal Loan Without Visiting A Bank

You can apply for instant loans online without going to the bank. Look for a reputed loan platform or financial institution in this case. Check for smooth online application processes. Most lenders offer online forms that you can fill out with your details and upload documents to complete the process. Some necessary documents include age, income, identity, and address proof. You will also have to provide your bank statements. .

Ensure you have a good credit score demonstrating your creditworthiness (750 or above) while maintaining a high balance in your account. It will convince the bank about your repayment capabilities. A stable monthly income and a low proportion of debts to your income are other factors to keep in mind.

Steps For Applying for A Personal Loan Through Online Channels

Here are the steps that you should follow to apply for online loans.

Short-list online lending platforms or financial institutions providing personal loans.
Choose a lender based on the eligibility criteria, interest rate, and other terms and conditions.
Visit the website or app of the lender and apply online by filling up the form and entering your basic details. These usually include your name, PAN card number, mobile number, address, and email ID.
Once you have registered, you will usually find available offers on personal loans that you can apply for.
Complete the KYC process and upload your documents after choosing the right personal loan for your needs. Some lenders ask for a video KYC process (through a video call) that you have to complete in this case.
The lender will verify your application, including your income and credit score. Based on your eligibility, the lender will instantly approve your application afterward.
You can then approve the loan offer and complete the formalities for making payments.
The lender will finally disburse the funds into your chosen bank account.

Now that you know how to apply for instant loans online, what are some factors to remember while choosing your lender? Read on for more.

Considerations For Choosing the Right Lending Option

Prior to submitting your application, here are some aspects worth noting for choosing the right lender.

Always compare interest rates from multiple lenders, across national banks, small finance banks and NBFCs. Go for loans that have the most competitive rates.
Keep an eye on the processing fees and other costs of the loan. Watch out for hidden charges on the loan.
Check the loan duration with care along with the frequency of EMI payments. Always go for a personal loan that is appropriate for your current financial circumstances.
Examine the eligibility criteria of the financial institution, including the age, credit score, income and profile of the borrower.

Always do your homework on the lender’s reputation before making a final decision.

Conclusion

You can thus get a personal loan without having to visit the bank. Yet, choose the right institution for your loan. Borrow responsibly and resist the temptation to go overboard. In some cases, if you have a good credit score and suitable income, pre-approved offers may be available from lenders. These may help you in terms of quicker processing and disbursals.

FAQs

1. What is the interest rate on personal loans?

The interest rate on personal loans varies from one financial institution to another. It is usually between 12 to 38% per annum.

2. What is the average tenure of a digital personal loan?

The tenure of a digital personal loan may vary across financial institutions and online platforms. It can be up to 36 months or slightly more, depending on the lender.