10 Second Loan Approvals: Should you opt for one?
These loans are disbursed immediately after an approval in 10 seconds. However, one should be prudent while availing funding under this route, as these are high cost personal loans.
With the government rooting for a digital currency era in the country, banks are taking a step ahead on this front, by offering not just digital currencies and payment methods, but also paperless loans.
In this world of instant gratification where everything from a steaming coffee to a cheesy pizza is available on the move, can banking products stay far behind?
The world of paperless loans
Applying for loans online is not a new concept in India. You may get pre-approved loans through mails and you can also place a loan application online through the bank’s website or through financial marketplaces. These loans save you from the hassles of multiple visits to the bank branch to know your loan eligibility and to apply for a loan.
The working mechanism of 10-Second Loan approvals
The offering is available on the digital banking platform. The loan amount will be calculated depending upon the personal profile of each customer and their financial credentials, including credit report. The bank can also access their KYC documents through Aadhaar linking.
To avail a personal loan, existing bank customers would simply need to login to their account online through net banking or mobile banking channel and click on the link to avail 10-Second Personal Loan.
Loans that can be availed through the 10-Second Schemes
As of now, only personal loans are available for existing customers under the 10-Second Loan scheme. Banking experts are of the opinion that, soon, other loans like home loans and automobile loans will also be available under such a fast, paperless digital transaction.
Does this really work?
Digital instant loan approvals will change the way we apply for loans; however, it comes with a number of challenges. As most loan approvals are based on income of the applicant, it will be challenge for the banks to approve instant loans based on the transactions in the savings account alone.
Based on this fact, it is presumed that banks are likely to link the loans with fixed deposits accounts or are likely to insist some protective caps on savings accounts, like an enhanced minimum balance, to safeguard them.
Things to know before opting for 10-Second Loan Scheme
If your bank is offering you a quick loan, your loan may just be one click away. But, before you login to your net banking account and seek a loan under the scheme, make sure you really need the loan and have a clear repayment plan ready.
Personal loans come with a high interest rate and offer good profit margins for the banks.
Also, make sure to check the fine print regarding service charges or any hidden charges before signing up for any loans.
While easy loan availability and extensive use of digital channels make it easy to avail a personal loan, the onus of repayment still lies with you as a loan borrower.