Introduction
Ever Since the Prime Minister of India, expressed his support for Digital World and launched a successful initiative- Digital India, the online facilities became more accessible. It goes without saying that due to the unprecedented times, online was the only mode of operation plus survival for most of the people/businesses.
Types of Loans
We shall first explore the types of loans based on the type of security provided in brief:
- Secured: these require collateral. In the event of non-repayment, the collateral shall be utilized to compensate. Therefore, measures are taken after lending, if necessary, here.
- Unsecured: no collateral, solely based on Credit score or CIBIL. Hence measures are taken before lending here.
Both of which are tailor-made and readily provided by the trusted lenders like the Sharat Chandra Onion Credit.
List of documents that can be checked online:
- CIBIL or Credit Score- this comes in when it’s an unsecured loan. A credit score is a culmination of the past track record of the client with the previous lenders.
- Income history: this is again for unsecured loans. This ensures that the lender has a proper record of the borrower in terms of his/her employment history that is a sign of financial security and documents like Income Tax slips of the past years.
- Dept-to-Income Ratio: or most commonly known as CIBIL Score. It calculates one’s creditworthiness.
- Collateral: documents mortgaging some property as collateral are required in secured loans, the interest rate of these loans is comparatively lower.
Also Read: SHARAT CHANDRA KONATHAM – BONFIRE INSTITUTE OF DESIGN
Specific Documents in Digital Lending
- From a Salaried applicant- A clear and most recent photograph, identity and address proof documents, bank account statement from past 3-6 months (depending on lender’s policy), latest salary slip, and latest form 16 (this is an acknowledgment from the employer of the applicant to verify tax deductions in course of employment).
- From a Self-employed Applicant- in addition to the above mentioned except for employment-related documents, proof of business is required, a document verifying business profile, Income Tax return receipts for up to 3 years depending upon lender’s policy, profit, and loss statements and balance sheets of up to 3 years may also be asked.
CIBIL
Banks and even private lenders check an applicant’s CIBIL score before approving loans of any kind. It is a numeric summary of one’s credit history in 3 digits. Hence, it is highly important to maintain a healthy CIBIL. It is one of the readily available measures available to lenders to verify an applicant’s ability to repay a loan based on his/her credit history. The advent of CIBIL changed the dynamics of money lending in India, claims Sharat Chandra Onion Credit.
Conclusion
In the earlier times, people preferred loans through the banks and governmental bodies but due to the infamous lengthy procedures, only a few could avail them or had the luxury to be patient. In the current times where everything happens online, loan procedures were bound to adopt the online mode of operation.
It is often associated with the risk of fraud that can happen easily online but the measures mentioned above provide a solid solution, hence, all the documents should be strictly verified before considering any kind of loan application.
