What is and how does the digital loan work?
What is digital or online loan? The digital loan is an online loan solution that allows people to sign up and apply for credit with simple request, paperless approval and quick release, made with the massive use of technology.
Until a while ago, loans were through traditional credit institutions, physical stores in major cities, made with filing documents, and little clarity about the status of analysis and approval, not to mention problems with documentation, etc., this system made the task of borrowing almost stressful.
What is digital loan?
In this new time, emergency agility times, digital lending platforms do everything quickly without dispensing the security and reliability of a 100% effective operation, every eligible citizen receives their financial resources based on their credibility, even in some cases , with the name being denied.
A digital personal loans platform combines advanced technology with the basics of traditional personal loan. Contractor profiles are evaluated by credit rating algorithms to understand the credibility of the proposer based on multiple internal and external factors.
In these digital credit platforms for medium and small businesses, besides MEIs, they can obtain credit, financing and working capital with better conditions than banks and financial institutions. Individuals and salaried individuals can also apply for loan lines for a number of personal purposes, such as health, buying new or second hand cars, spending holidays, traveling, getting married, making improvements to the house, etc.
Why do we need digital lending platforms?
Fintechs’ diverse projects have emerged in Brazil at the right time, they provide a springboard for individuals and companies wishing to borrow from banks. We need because of the ease, this combination of data, algorithms and technology, really solve quickly the financial problems that are affecting thousands of Brazilian citizens because of the veiled crisis that we are having here. It is worth mentioning that financial services are one of the biggest contributors to Brazil’s GDP.
Defying the banks, the idea of Fintechs with online platforms is to simplify the offer of financial services, to offer fast and effective applications with appropriate interest rates. The discovery of the need for digital lending platforms arose primarily due to deficiencies in traditional lending solutions. Some other factors for this emergence are:
Making use of credit technology certainly puts a lending company in the driver’s seat. For processing the loan application, there is system for everything needed to verify the documents, process and analyze the loan and what releases the loan amount approved.
All of this is done with the help of 100% online credit models that use borrower data. The digital loan allows a continuous updating of the tools needed to make the online loan experience faster and better than the traditional means.
Members 100% online
Imagine not having to go to a bank to deliver the documents, photocopies, application forms and sign dozens of contract sheets. With digital loans, documents can be sent via computer or mobile phone, by email or via upload on the platform’s online system.
The credit history and credit report of the borrower is searched online in various sources of information ensuring a safe and reliable operation for both the borrower and the lender who will lend the money.
Digital and automated processes
In the online loan there is less human intervention involved in the operations. There are no attendants to physically receive your request form or your physical documents. Therefore, there is no chance of partial document tampering or impartial lending decisions through the credit approval mat, in addition, in digital loans the credit assessment time is extremely reduced.
Online application and application
At platforms and marketplaces, the use of a simple online application form replaces an exhaustive stack of documentation that could take up to one hour to complete along with the necessary references and signatures.
Approval and release
With traditional loan solutions, an application can take up to 2 to 3 days to complete the loan until the approval stage for release, in a digital loan platform will make that time decrease to only a few minutes or hours depending on the type of loan or confirmation of data or documentation. If all eligibility criteria are met, the same day the money is in the account.
Security in transactions
The money released on a loan is a constant concern that involves handling sensitive information from the contractor (borrower) including bank details and even passwords. This makes ostensive data protection essential.
Mainly because there are countless occurrences of identity theft reports, fraudulent loan websites, and misuse of third party documentation, this news makes some citizen skeptical of relying solely on loans made digitally.
Therefore, verifying that the virtual lending platform is legitimate and legitimate, if it has authentic credentials and references and that makes use of SSL layers for encryption in transactions, it leaves the borrower quieter. It is worth mentioning that all operations are requested from the bidder’s live selfies in addition to the documentation.