Impact of digitization on home loans

The home loan process has been digitized these days by giving digital applications for loans to the lender. The borrower can opt for home loans from any lender during the purchase of the home. These days all the banks & NBFC’s have made user-friendly facilities to upload the documents and process the loan easily paperless. The home loans are processed faster in case of the digital process of applying for the home loans. The home loans documents need to be uploaded digitally, and then after the screening of the documents, the loan is approved by the borrower. The home loans can opt for a maximum tenure of 30 years; however, the actual approval of the tenure of the loan depends upon the borrower’s age. The home loans digitization process makes the borrower avail loans application paperless and from the convenience of the home. The digital process is instant & fast, and within no time, the home loan applicant can upload & submit the documents to the lender. The digitization helps in making the home loan approval process easy for the borrower.

The banking sector has seen the largest digitization of the home loan process. Digitization has taken place in all aspects, from digital money transfers to digital maintenance of the bank records and making all the records paperless. Also, the proofs of each of the transaction can be recorded digitally and thus remains as a permanent proof. The digitization of the bank process has helped drastically reduce dependence on labor and made the systems work fast & efficiently. The banks can perform efficiently and seamlessly due to digitization in the banking system. In previous days banking was a very tedious process, but the computerized systems made it simple and easy. The turnaround time for the approval of the loans has also got reduced due to digitization. The approval of the loans application requires proper documentation and proper CIBIL records—every lender checks for the credit history of the borrower before the approval of the loan. The higher the CIBIL score higher are the chances that the loans get approved by the borrower. The bank immediately knows whether the loan applicant has defaulted with the home loans anytime, which can lead to rejection of the loans.

Following is the impact of the digitization on home loans

  • Paperless transactions of the home loans:

The records are maintained digitally in the banking system in case of the home loans in the digitization process. The home loans documents records and agreement is stored digitally into the bank’s server. This reduced the manual work for the home loans. The digitization of the records makes it easy for the bank officials and the borrower to access the records and documentation easily whenever required.


  • Data analytics:

Home loan approval requires the evaluation of the borrower’s income, job type, the brand value of the company, age. Etc. The eligibility of the borrower’s loan is also calculated digitally with the help of a digital EMI calculator. The EMI calculator, which is present on the bank’s website, helps the loan applicant understand the amount of loan the borrower is eligible for. The total repayment value is applicable in the repayment value for the home loans and the interest amount.

  • Information sharing:

Digitalization has helped to maintain privacy amongst the borrowers as the documents can be accessed only by the select bank officials who are amongst the approval committee. Thus this process helps to maintain privacy for the home loan applicant so that the document does not land into the hands of the wrong person, as the documents contain private & confidential information like salary proof, identity cards, and income tax returns proof. Thus the security and privacy of the borrower are necessary.

  • E-KYC and SMS alert:

The E-KYC helps the borrower get the documents digitally being verified and also get SMS alerts for the home loans. SMS alerts help the borrowers update with the latest updates about the approval of loans, the loans’ due date, and acknowledgment of the EMI being received by the bank.

  • Pay the EMI online:

The digitization has helped the home loan borrowers pay the installments online through debit card/net banking. Etc. Also, the borrowers can get an immediate receipt for the payment of the installments.

The above points are necessary for the borrower to be known in case of availing home loans. The borrower can digitally upload all the documents and get the home loans approved faster than the manual process. And also can check with the loan application whenever required, pay the EMI’s online digitally, and receive SMS alerts for the same.

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