April 17, 2024

New knowledge base

Look In The Business

Here are the key benefits of online personal loans vs traditional loans

Bank Loan VS Online Loan, What's Better? | Surau.co

Technological advancement has led to considerable transformation in the lending vertical. As most lending products are readily available online, many now prefer hitting on the personal loan apply online button in times of financial crunch. However, this does not infer that the offline personal loan application option is dead. 

Discussed here are the key benefits of online and offline personal loan applications. Read on to understand and accordingly choose the option based on your preference and the deadline by which you require the loan proceeds. 

  • Offline personal loan

Offline is a traditional mode to apply for a personal loan where you are required to approach the lender’s branch physically to fill out the loan application form. Along with the application form, you must submit hard copies of your KYC documents. As you get the chance to interact with the lender directly, you can request for a customised loan deal better in a traditional mode than online route. However, this route is not ideal for those who are technologically sound and are searching for a quicker application process. 

  • Online personal loan 

Digitalisation has transformed the entire lending space. By selecting the online personal loan apply option, you can avail the required loan proceeds from the comfort of your home. An online personal loan is a prudent mode to apply for a personal loan, which involves nil or lesser documentation and quick processing time. Usually, in the case of an online preapproved personal loan, you may receive the proceeds of the loan on the same day of placing the loan application request. 

Comparative analysis between online and offline personal loans– 

ParticularsOffline personal loanOnline personal loan
ConvenienceRequires you to approach the lender physically and fill out the required application form.No need to physically visit the lender. You can place the application at anytime from anywhere by visiting the lender’s website.
Human interactionExists; You interact face to face with the lender to get a customised deal as per your preference.Nil; All the processes are conducted online with no requirement for direct interaction with the lender. 
Document requirementRequires you to fill out the application form physically and provide a hard copy of your KYC and income documents.  Requires you to submit nil to minimal documents in the case of a preapproved personal loan application. In the case of an online application for a regular personal loan, you must fill out the online loan application form and attach a soft copy of your KYC and income documents. 
Processing timeProcessing usually takes between 2 and 7 days depending on your credit profile, the documents provided, and the lender.In the case of preapproved personal loan application, the loan proceeds may be processed on the same day of placing the application. 

Which is the best deal – Online or traditional personal loan?

Whether you should you opt for the online or offline personal loan depends on your preference and the time by which you require the proceeds. As online preapproved personal loans usually may have a slightly higher personal loan interest rate owing to their instant nature than a regular personal loan, it is advised to compare between both the offers to make an informed decision if you do not require the funds instantly. The offline route offers you the convenience to request a customised loan deal and negotiate on the rate and convince the lender as per your cash inflow and repayment capacity. 

However, if your requirement for funds is instant, the online preapproved personal loan route is a prudent option you can go for. Note that before you zero in on any option, you must compute your preferred personal loan EMI that you are willing to incur per month as per your affordability using an online personal loan EMI calculator. Once you are aware of the EMI you can service, negotiate with the lender to get the same deal.