Bank V/S Loan App: Which Do You Prefer?
You have a unique dilemma: you need a personal loan and can either apply to a bank or a loan lending app. But you don’t know if the two entities approach the process differently. Read on to know more.
Applying for a quick loan with a bank…
If you have a long-standing relationship with your bank, you may already have a pre-approved personal loan waiting for you. The bank assures you that you can get the loan in just a few minutes and ‘a few clicks’. These loans may be processed a little quicker because the bank already has details of your bank account, though you must still furnish proof of your income and other factors. However, when you apply as a fresh candidate for the instant personal loan:
The bank asks for a set of documents to prove your age, income, residence address, bank statements, etc. These are sent for legal and financial scrutiny to the respective departments
The bank verifies your CIBIL credit score. If the score is below 750 but above 600, your application is sent for a second scrutiny. During this time, the bank takes a detailed look at your credit reports. It may take a day or two for the bank to revert on your application status, or move ahead with the approval. If approved, you may be charged a higher rate of interest
If the score is found below 600, the application is rejected. You cannot apply to the same bank for one year (please ask the bank about its specific policy regarding the same). The bank also notes any hard inquiries for loans to other banks, or if you make credit card applications despite a low credit score
You may apply to another bank for the personal loan, or reapply to the same bank after the stipulated waiting period is over, provided you have a better credit score at the time of re-application
Applying on a personal loan app…
Applying for an instant personal loan on a lending app is a different proposition altogether, as compared to a bank application. This is how the process goes:
You start by downloading the app on your smartphone and setting it up as directed
Browse the app for personal loans and credit line loans and note the benefits of each
Check your loan eligibility on the app, use the calculators to find the monthly EMI payable, check the documents list and interest rate, etc.
Make the loan application and upload the documents as directed
The app now checks your CIBIL and Equifax scores, and uses its unique AI-backed algorithm for more insights into your financial behaviour. Other agencies scrutinise your documents at the same time. These checks are performed thoroughly but quickly to get a sense of your credit worthiness
If found unsuitable, the app notifies you of the loan rejection. You may reapply after three months with a higher credit score. If approved, you are notified of the same and the loan money is disbursed to your account in few minutes
All in all, the personal loan app takes a few hours from processing your application to disbursing the loan money
Conclusion: Which one do you choose?
When faced with a financial emergency that needs a large infusion of funds in a hurry, why would you choose a bank loan which takes longer over a lending app loan that is approved faster and with zero hassle? The choice is yours!
