When faced with an urgent financial need, many people find themselves in situations where there isn’t enough time to thoroughly consider their loan options. In such cases, they may resort to borrowing money from individuals or entities that charge high interest rates. This often leads to further financial strain, forcing some to sell valuable assets like their homes or property just to keep up with repayments.
Small vs. Large Loan Needs
Borrowing Small Amounts
For minor financial needs, it’s sometimes possible to borrow small amounts from neighbors or friends. These loans may not involve much paperwork or stringent conditions, making them easier to access quickly.
Borrowing Larger Amounts
However, when the need for money is significant, turning to banks becomes almost inevitable. Personal loans are a common solution in such cases, providing the necessary funds to meet urgent financial obligations. However, navigating the rules, regulations, and required documents of banks can be overwhelming for many customers.
The Solution: Digital Loan Services Through ONDC
Introduction to ONDC
The Open Network for Digital Commerce (ONDC), a government-backed agency, offers a modern solution to these financial challenges. Launched on August 22, ONDC provides loans in just 6 minutes, aiming to simplify the loan application process and make it more accessible to those in need. ONDC was initially established on December 31, 2021, and has since expanded its reach to over 1,000 cities and towns across India. The platform has connected with various banks and financiers to streamline loan distribution.
The 6-Minute Loan Process
- Digital and Paperless: ONDC’s loan disbursal service is entirely digital and paperless. You can apply for a loan from the comfort of your home without the need for any physical documents.
- Online Application: To apply for a loan, applicants must submit necessary documents online. These include:
- Aadhaar Card or DigiLocker for KYC verification.
- e-Signature linked with e-NACH (Electronic National Automated Clearing House) for account verification.
- Approval in Minutes: Once these documents are submitted, the loan approval process takes just 6 minutes.
- Versatile Loan Options: ONDC’s platform supports a variety of financial products, including credit cards, insurance products, mutual funds, and loans tailored for farmers and students.
Participating Banks and Financial Institutions
Currently, nine companies are registered with ONDC, providing access to this quick loan service:
- Aditya Birla Finance
- Tyreplex
- Clinic360
- Karnataka Bank
- DMI Finance
- Tata Digital
- EasyPay
- IndiPay
- InvoicePay
Moreover, several banking and financial companies are in discussions to join this initiative, including:
- IDFC First Bank
- MobiKwik
- RuPayBass
- Tata Capital
- Kotak Mahindra Bank
- Central Bank of India
- Axis Finance
Upcoming Services: GST Invoice Credit
In addition to personal loans, ONDC is planning to introduce a GST Invoice Credit facility by the end of September. This service is designed to help small entrepreneurs secure quick loans by leveraging their GST invoices. The initiative will further ease the process of obtaining loans for individuals and businesses across various sectors, providing them with the financial support they need when they need it most.
Conclusion
The introduction of ONDC’s digital loan services marks a significant step forward in making financial support more accessible and efficient. By reducing the paperwork and wait times traditionally associated with loan applications, ONDC is helping to ensure that urgent financial needs can be met quickly and without unnecessary stress.