The implementation of technology has revolutionized business processes in almost every industry and has become an essential strategy for those who wish to succeed in this competitive environment. The home lending space has been relatively untouched by this technological revolution, primarily due to higher note size being a mainstay of traditional lenders. However, the increase in online connection brought about by the pandemic and a fintech game in this space is now a game-changer. The marketplace not only connects a bank with the borrower but completes the entire process on its platform.
A lockdown-induced wrench has forced banks and policymakers to simplify lending procedures. The biggest winner was, of course, home loans, which have their own set of complicated documentation needs. However, step by step, the entire home loan journey is now simplified with measures such as KYC video, virtual application, secure retrieval of bank and tax details online and direct integration with systems. banking.
Pain points during the offline process
Although we live in the era of digitalization, getting a home loan in India is still a time-consuming and paperwork-intensive process cluttered with multiple levels of documentation and approvals, including physical visits to the banks. In the offline process, everything from iterative documentation to stamping is done manually, with an emphasis on submitting physical copies as well. Therefore, it is possible that important documents may be misplaced or lost during transport. In this case, the bank may contact you with additional questions or requirements, which will lengthen the process.
Even if everything goes well, the sanction and approval procedure could be delayed. And since there is so much paperwork needed during the application phase, checking the status of the application becomes complicated. In addition, borrowers feel that they have to pay interest and application fees when taking out a loan. However, they eventually learn that several hidden costs are involved and are notified later.
Apart from this, in the case of a home loan, the property serves as collateral against the loan. Therefore, banks spare no effort to ensure that they lend money for a property that is part of a verified project. The bank’s ownership verification process requires the intervention of a buyer, which is both time-consuming and stressful at this time. Depending on whether the property belongs to a new builder or an old property, the buyer must produce all the documents proving that the builder has all the necessary permits to start construction.
Benefits of Applying for a Digital Home Loan
The digital loan offers several banking options personalized to a borrower’s profile; they can compare loan amount, loan term, etc., and therefore usually get the best out of the market. This saves time and money.
With technology-based loan offers and applications, the loan process becomes instantaneous and does not require physical intervention in most cases. And since everything stays online, it results in a hassle-free application and documentation process. Additionally, transparency is maintained with real-time application status throughout the journey.
All this allows the consumer to have a path of research and selection of real estate loan parallel to the search for the house of his dreams. This gets them online for home loans much earlier in their buying journey, and they use this time (typically 3-6 months) to compare and choose their loan option. Sometimes they can objectively freeze their budget through this exercise. In addition, the efficiency of the entire home loan value chain ensures faster disbursement of TAT (apart from benefits such as instant e-sanction, etc.).
Buying a home is something that many people dream of, so make sure there are no obstacles. Right now, digital home lending works best with “zero” physical contact. It acts as a one-stop shop where you can discover loans, choose the best option, and apply online. Thus, the home loan market is experiencing an understandable shift towards digital loans. We can see tech companies simplifying home lending, taking over the market and becoming the common link between banks, borrowers and developers. When you’ve finalized your dream home and are also taking financial responsibility for it, the least technology can do is simplify the experience. Next time, connect to a Fintech platform for home loans, which leads the process from start to finish, so you have more time to enjoy the feeling of owning your dream home.
The opinions expressed above are those of the author.
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