How Instant Personal Loan Apps Have Disrupted The Financial Space
The addition of the suffix tech to finance has disrupted how the financial industry lends and borrows. Read to know more here!
Until a few years ago getting a personal loan meant that one had to visit the office of a bank or a non-banking finance company, fill out forms, complete tedious paperwork, submit documents and then wait for one’s details to be verified. And only after this long process the loan money would be actually disbursed into one’s bank account.
This process could take anywhere from a few days to even a few weeks, causing much anxiety and hardship to the borrower who may have been in urgent need of money.
The Emergence Of Instant Loan Apps
But now, with the near universally available Internet and digitization, a lot of this has changed.
One can now apply for a personal loan online, from the comfort of one’s home and submit all the documents needed online and then have them verified and the application approved in just a few hours. If everything is in order, the loan can even be disbursed within a day.
And one major reason behind this trend has been the emergence of online loan apps that have changed the loan market in India, and all across the world.
In fact, over the last few years, personal loans have evolved to become instant personal loans. These online loan apps make it convenient for prospective borrowers to register, log in and then apply online for a personal loan. Applications are processed quickly and loans disbursed, all within hours.
What makes this instant processing of loans possible is artificial intelligence-based technology that is being used by these online apps in the hybrid cloud.
These AI-based tools are used by the instant loan apps along with other machine learning tools and algorithms that generate customer data related to their credit history and spending trends. This takes them a step ahead of traditional banks that often do not have sufficient data on their customers or their banking transactions.
The advent of cloud computing has allowed banks and non-banking finance companies to access income tax records and also privately and publicly available information on individuals and their financial history.
Along with cloud computing, these instant loan apps also use so-called APIs (application programming interfaces). APIs are essentially pieces of software that allow two or more applications to interact without any human intervention.
Beyond these two technologies, instant loan apps also use tools like robotic process automation, prospective security and blockchain.
Blockchain, which is now becoming increasingly popular, is basically a series of records, much like timestamps, that has been introduced with the emergence of cryptocurrency. The blocks in a blockchain are records that are available across different computers and track transactions.
Having said all this, loan apps are often not 100% secure. Not only do online frauds and scams abound, the data migrating across clouds, servers and banking systems poses a serious security threat of a breach of user data and sensitive customer information.
Moreover, as technology evolves, newer and newer threats keep evolving and borrowers and loan companies themselves are often caught unawares.
The fact that instant personal loan apps have redefined the lending industry cannot be denied. Not only have these apps made the process of taking out a personal loan quick and hassle-free, they have also led to a growth in the overall lending market.
Having said that, as a borrower you should trust only reputed lenders like IIFL Finance, which also offer instant online personal loans and apply all of the new-age tools that are available today
Well-established companies like IIFL have secure servers and follow stringent security norms that ensure user data is protected and any chance of a breach is minimised.