Instant Personal Loan: How does digital KYC expedite the approval process? Find out

Over the past few years, the finance sector has witnessed technological advancements in almost all aspects of their working. Amongst these innovations, digital KYC (Know Your Customer) has become critical in providing you a completely digital and quick loan application experience.

With digital KYC, instant personal loans have taken a huge leap and have attracted a great number of borrowers who are in need of quick cash to cover their financial needs. Let us understand in detail how digital KYC has shaped instant personal loan approvals. 

What is digital KYC?

Digital KYC is a process of conducting KYC using digital methods and online platforms. It replaces the standard KYC procedure where you are required to physically visit the bank and submit hard copies of documents that are then reviewed manually. Digital KYC completely transforms this entire process and makes it more secure and saves you time and makes the entire loan process quicker.

How does digital KYC transforms instant personal loan approval process

Seamless integration with loan portals: Online loan application and approval processes rely on digital KYC and verifies your identity in real time with the help of Aadhar card and Pan card details.

Automated credit assessments: With digital KYC, lenders use this technology to fetch your credit history and past borrowing through which they can quickly determine your creditworthiness and eligibility for the loan transparently.

Paperless process: This process being completely automated eliminates the use of paper and thus become cost effective for both customer as well as the lender.

Enhanced user experience: With the digital KYC you can save your precious time and get your instant loan application process completed at the ease of your home. Thus enhancing your overall experience.

Enhances fraud prevention: With digital verification of all your documents, the risk of frauds get minimised for the lenders which was very prevalent in earlier times. Digital KYC uses face recognition and biometrics features which makes the entire application process safe and secured.

Promotes financial inclusion: Digital KYC also provides a platform for the remote areas to avail the facility of instant personal loan without going through the hassle of visiting the bank which might not be that convenient for them.

Challenges to digital KYC

Data privacy concerns: Digital KYC is highly dependent on sensitive personal information. Hence, in order to have a seamless and secured application process, lenders need to make sure that they have an up to date security system. In addition to this, you must ensure that you always use a secured internet connection and avoid using public WIFI for any loan related work.

Digital literacy: Till today, many people are skeptical about technology and the modern ways of personal loan application process. Hence, digital literacy will always be a hindrance for digital KYC in instant personal loan applications.

Dependence on infrastructure

Digital KYC needs a good internet connection in order to have a smooth and quick verification process. However, this can be a challenge in rural areas where internet connectivity is still not completely available.

In conclusion, digital KYC has indeed revolutionised the process of instant personal loan approval. However, irrespective of the convenience, you must ensure that before you proceed with the application process, you analyse your financial condition and evaluate whether you really need the loan or not. With this you will be able to avoid unnecessary burden on your finances and make informed decisions.

One must also understand that instant personal loans involve much higher interest rates than any other loan in the market and provide comparatively lesser amounts as loan. Hence, it is advisable to explore other options as well before making a decision so that you can get the best deal which suits your budget.

(Note: Raising a personal loan has its own risks)