Accessing funds in a timely manner is crucial for most businesses since growing or expanding operations can become challenging without capital. However, with most traditional banks, the time taken to get approval for a loan facility can be too high. Here is where Lendingkart comes into the picture.
In this article, we will explore Lendingkart’s loan approval process and how it stacks up against that of traditional banks to help you make a well-informed choice. Additionally, we will also compare the approval times of digital lending vs. traditional lending so that you can make an informed decision as a business owner.
Understanding the Loan Approval Process at Traditional Banks
Traditional banks have been the primary lenders for small businesses for decades. However, their loan approval timelines are often slow and complex. This can be highly disadvantageous, especially for businesses that need quick access to funds to tide them over operational expenses or meet a sudden surge in demand.
To get a business loan from traditional banks, you need to visit the branch, manually fill out paper forms and provide numerous physical documents to support your loan application. Once the bank receives your application, it will then manually verify your application and documents, conduct credit checks and follow internal approval protocols.
The entire loan approval process of traditional banks usually takes anywhere from a few days to several weeks, depending on the institution. In addition to this, banks typically have stricter eligibility criteria and may even require you to pledge an asset as collateral, which can further delay the process.
Understanding Lendingkart’s Loan Approval Process
Fortunately, the loan approval process of Lendingkart is significantly more agile compared to that of traditional banks. Let us try to understand how it works.
Lendingkart is a digital-first lending platform that offers quick and convenient loans to small and medium enterprises. The platform leverages a fully online loan application process to speed up the time it takes to apply for a credit facility. You can submit your application and documents digitally from anywhere in the world at any time without visiting a branch.
Once you submit your application, Lendingkart uses a data-driven evaluation process to assess your creditworthiness. This use of technology enables the platform to approve loans within 24 to 72 hours, provided all documentation is in order. In some cases, the loans are approved on the same day. The streamlined system eliminates the bureaucratic delays often associated with traditional banks, making Lendingkart the ideal stop for businesses that require urgent funds.
Comparing Approval Times: Lendingkart vs. Traditional Banks
Time is a valuable asset for any entrepreneur, especially those with urgent financial requirements. When comparing digital lending vs. traditional lending, the loan approval timeline is a crucial metric where digital lenders like Lendingkart have a clear upper hand.
For example, Lendingkart’s digital systems can approve and disburse loans within 3 working days. This is possible because the entire journey, from application to verification, is automated and data-centric. On the contrary, traditional banks may take up to 15 to 30 days to complete the loan process. This is because banks rely on human intervention, layered approvals and risk-averse policies, which slow the process down significantly.
Why is Lendingkart’s Loan Approval Process Faster?
If you are a business owner looking for quick access to funds, Lendingkart processes loan applications more quickly than traditional banks. Here are some key reasons behind Lendingkart’s speed and how it benefits you as a borrower.
1. Fully Digital Application Process
Lendingkart offers a paperless loan application experience that can be completed online. The fully digital process eliminates the need for physical paperwork or branch visits, saving valuable time. As a matter of fact, you can submit your details and upload documents from your home or office. Traditional banks, on the other hand, often require in-person appointments and multiple document submissions, which delay the loan application and approval process.
2. Automated Credit Assessment
One of the biggest advantages of Lendingkart is its use of artificial intelligence (AI) and machine learning (ML) to evaluate loan applications. The platform uses a proprietary credit evaluation system to automatically analyse multiple data points to determine your eligibility. Since the evaluation system is automated, it takes only a few minutes to assess your creditworthiness. Traditional banks, meanwhile, do manual verification and credit appraisals, which can take several days or even weeks.
3. No Collateral Requirement
Collateral is one of the key differentiators between fintech lending vs. bank loans. Being a fully digital lender, Lendingkart’s loans do not require you to pledge any physical asset as collateral. In addition to being highly advantageous for small businesses and startups with little to no assets, the no collateral requirement clause simplifies and speeds up the approval process significantly.
When applying through traditional banks, collateral verification and asset valuation often add significant time to loan processing. Lendingkart’s unsecured lending model offers a faster route for business owners who need urgent funding without asset-backed guarantees.
4. Minimal Documentation
Another key differentiating point in the digital lending vs. traditional lending debate is the documentation requirements. Traditional banks often require you to submit extensive documentation, which can take days to prepare and consolidate. Lendingkart, meanwhile, requires only essential documents such as your PAN, Aadhaar, bank statements, and GST registration details. This reduction in documentation compared to banking institutions reduces the time taken to approve the loan.
5. Simplified Decision-Making Framework
Unlike traditional banks, which rely on multi-layered internal approval hierarchies, Lendingkart uses a simple, algorithm-driven decision-making process. This means fewer people are involved, and decisions are made quickly based on data instead of subjective judgment. The simplified framework enhances both speed and transparency.
Conclusion
With this, you must now be aware of how Lendingkart’s approval times compare with traditional banks. If you are still confused between digital lending vs. traditional lending, it is advisable to compare the benefits and drawbacks of each approach. This will help you choose the lending option that best fits your business requirements and growth timeline.
For example, if fast loan approval or zero collateral loans are more important to you, opting for fintech lenders like Lendingkart may be the right solution. On the other hand, traditional banks may be more suitable if you are looking for lower interest rates and can deal with the slower loan approval times.
Remember, choosing between fintech lending vs. bank loans is a strategic decision that must be made carefully after thorough research.