Soon, you can track all your loans online

Tags: News
To usher in greater transparency, the finance ministry has asked banks to sell all their retail loan products such as home loans, car loans and personal loans online. The domestic lenders have also been told to facilitate prima facie approval of loans online and set up loan-tracking systems by July 10.

The move is aimed at ensuring uniformity in loan processing and ending the current practice of using different criteria for different customers.

Once the finance ministry directive gets implemented, you will be able to buy a retail loan product online, check the status of a loan application and track the progress of repayment at the click of a mouse. This, even if one is not an user of internet banking.

Some banks have already set up online loan tracking systems, and others are in the process of implementing similar platforms.

“The ministry is probably trying to get all asset products online so that there is transparency for customers. In the first step, it may be experimenting with retail products,” said the executive director of a public sector bank, which has received the finance ministry directive.

Barring a few big players, most lenders do not even have fixed criteria to approve a home loan. “The eligibility criteria differ from bank to bank. Some banks offer loans for 20 years, others for 25 years and some for up to 30 years depending on the age of the applicant,” said the head of the retail loan division in a public sector bank.

Some banks have started approving home loans for up to 30 years if the applicant does not cross 70 years on the due date of the last loan instalment.

The Reserve Bank of India (RBI) has also been pushing the banks for gre­ater transparency and fair play with customers. Last year, RBI lifted the prepayment penalty that banks used to charge for repaying a loan ahead of time. Loan customers can now prepay entire loans without attracting any penalty.

manjuab@mydigitalfc.com

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