Speeds up your loan process Because you do not have to submit physical documents under digital KYC, your Aadhaar and PAN are authenticated online, most often through an OTP. It is much quicker for the lender to authenticate your identity and go ahead with the loan. You do not have to wait for days but could get approval within minutes if everything is fine.
Helps get instant approval Most lending platforms and apps nowadays employ digital KYC to approve loans in a flash. If your bank details and ID are verified online, the cash is likely to be deposited in your account within a few seconds. But if your KYC is not linked correctly or it is incomplete, your application might get held up or rejected.
Keeps things safe and legal Digital KYC uses live selfies and online identification verification to guarantee that you are the person you say you are. This reduces the risk of using fake documents. Lenders also have to follow Reserve Bank of India guidelines, and digital KYC helps them do so without compromising your details.
Makes loans available to more individuals People with no salary slips or high bank statements—like students, gig workers, or homemakers—can also apply if you have your digital KYC done. Some lenders use this to offer small loans even if you have not availed of credit earlier, bringing formal credit to more people.
Properly establishes your credit history If your KYC details are correct, the loan is sent to credit bureaus free of discrepancies. That's important in building your credit score. If your details are erroneous or incomplete, your loan may not be reported correctly—which has future implications on your borrowing.
Makes future loans easier When you've done digital KYC, availing of loans or top-ups the next time becomes so much easier. Your information has already been checked by lenders, and therefore, you don't need to go through the process once again. You save time and you'll receive speedy approvals in the future.
