Paperless Credit Has Now Become a Reality in India

Following the current scenario of the Indian economy, it can be said that, visibly India is gradually moving towards a digital economy. The upsurge in digital transactions post demonetisation has been phenomenal.  An increasing digital shift in economic transactions has given rise to paperless credit. Thanks to Fintech companies who have adopted a seamless model through technological deployment, paperless credit has now become a reality.

Digital verification of consumer profiles is the norm these days, with many Fintech lenders eliminating the need for physical paperwork as part of the loan process. Until about a few years ago when banks were the prime lenders in the market, getting a loan involved a lot of paperwork and related verification processes that took several days to complete. With the evolution of unsecured paperless credit offered by Fintech companies, eligible consumers can now get super-quick access to funds within a time-window of just 24 hours. The main idea of paperless credit is to provide swift and hassle-free access to credit services to the consumer.

But how has this become a reality? Let’s find out.

Needless to say that over time paper cards have become a reality. One of the major reasons behind the same happens to be the ease of application process. When you apply for an instant loan from a Fintech company, you can submit the required documents online either through the lender’s mobile application or website. Lenders usually require you to submit copies of your KYC documents (PAN card and Aadhaar Card), salary slips of the last three months, and bank statements. You do not have to download copies of your electronic bank statements and submit them via email; you can directly login to a secure interface called Perfios with your internet banking credentials and upload your statements within seconds. However, note that in this process, only your bank statements are retrieved and the lender does not get access to your netbanking User ID and Password. Therefore, information entered by you is protected by encryption.

Risk-assessment algorithms are yet another reason that has led to the emergence of paperless credit. Fintech lenders these days use risk-assessment algorithms to determine the eligibility of applicants. These algorithms examine a wide range of parameters starting from an individual’s credit score to repayment history, employer categorisation and total outstanding dues. As soon as you provide your KYC information, your credit report is immediately pulled from the bureau, and the algorithm analyses important credit attributes linked to your profile. If your credit score, repayment history, and other aspects satisfy the lender’s underwriting norms, you will receive approval instantly, indicating to you that you are eligible to receive a loan from the lender. After receiving initial approval, you can go ahead and submit your documents as mentioned in the previous point.

Digital verification methods also play an important role in this overall process of paperless credit. Your identity, address, and accuracy of information provided by you are digitally verified, not requiring you to meet with a representative from the lender. Earlier, besides submitting a long list of documents, you would have had to meet with an executive who would verify addresses proof. Thanks to the paperless model adopted powered by technology, you no longer have to physically meet anybody to get your loan. The entire process can be completed online. As a matter of fact, getting a loan online these days is easier than ordering a pizza online!

The author is the Founder and CEO, Qbera.com