Personal loans made easy via ATMs and apps: How it works

It’s not just large private sector banks that are offering instant loans to their customers through ATMs or via online bank accounts. Financial technology start-ups are changing the way personal loans are disbursed to borrowers.

India’s largest private sector lender, ICICIBank, started offering personal loans to its pre-selected salaried customers through its ATMs. Only those on the bank’s pre-approved customers’ list based on their credit score would get the option to avail the facility.HDFC Bank has been offering instant loan through net banking. But if you don’t have a credit history or a longstanding banking relationship, you can approach start-ups such as EarlySalary.com, LoanTap, and so on

As these lenders target customers who don’t have any credit history, they use a variety of parameters to evaluate the customer’s profile. They access an applicant’s social media account and build a profile after getting information through the app such as friends’ list, location, etc. They also evaluate the spending habit after evaluating the customer’s bank account statement.

EarlySalary.com.offers short-term loans from a day to a month.Once a person takes 5 minutes to fill in the loan application on the company's app, the KYC, signing of documents and disbursement can be done within a few hours. From the next time onwards, the disbursement is instant. “Around 35 per cent borrowers are new to credit,” says Akshay Mehrotra, co-founder and chief executive officer (CEO), EarlySalary.com