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.

Recently, India’s largest private sector lender, ICICI Bank, 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.

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