Loan

Should you take an instant home loan? Is it really instant?

Instant loan is the newest credit facility offered by several scheduled commercial banks, non-banking financial companies and some other structured lenders.

home loan: Should you take an instant home loan? Is it really instant?

Instant loans and the digital medium has diminished the manual verification process.  |  Photo Credit: Representative Image

New Delhi: Instant loan is the newest credit facility offered by several scheduled commercial banks, non-banking financial companies and some other structured lenders. As most of the KYC formalities are completed online with the help of government-issued IDs, the repayment history, credit score and the prevailing loans or credit facilities availed. With the institution of instant loans, be it a home loan, personal loan, vehicle loan, the turnaround time in the loan processing has been reduced substantially.

All the credit facilities such as loans, overdrafts, credit cards, equated monthly instalments (EMIs), have respective pros and cons. The advantages and disadvantages of these credit products are dependent on the customers’ earning capacity, repayment behaviour, and other credit characteristics. As far as the instant loans are concerned, the loan sanction letter is issued via the digital channel. However, a customer is required to visit the bank branch of the office of the credit issuing firm, at least once.

Instant loans and the digital medium has diminished the manual verification process to a higher extent as the creditworthiness of the user is assessed by his detailed credit profile available with the credit assessment companies. The banks and the financial institutions which provide the facility of instant loans also incorporate non-credit and qualitative information of the customer to take a conclusive decision on the creditworthiness of an individual.

The branch visit is mandatory because home loan involves certain checks and several due diligence processes which are required to be completed before the sanction of the loan amount. The due diligence involved in the process of granting a home loan includes details the property purchased, usage documents, all round verification of the builder.

The total process involved in the instant loan up till the issuance loan sanction letter is carried digitally. The borrower is mandated to visit the branch along with the prerequisite documents of the property, income statements, ITR filing receipts, total sources of income, etc.

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