Paperless loan: Difference between revisions

Paperless loans are normally offered where the borrowers circumstances are straight forward, i.e. salaried individuals with a good [[credit score]] and documents may not be required if the information can be verified electronically. They are also offered by [[payday lenders]] and online -only loan companies for smaller loans. The lenders may make the process very simple and instead of quoting [[interest rate]]s will express the loan in terms of a fee that is paid when the loan is repaid, which may equate to very high interest rates.

The advent of paperlessPaperless loans developed started in the 2010s as the internet and mobile access becomebecame easily available and, lenders could use electronic verification of the borrower to make lending decisions, and [[electronic signature]] became available and was accepted in law.<ref>{{cite web |url=https://www.lawnet.gov.lk/giving-consumer-disclosures-on-line-is-esign-the-path-to-the-paperless-loan/ |title=Giving consumer disclosures on-line: is ESIGN the path to the paperless loan |access-date=May 31, 2024 |publisher=Ministry of Justice - Sri Lanka}}</ref>

Some people argue that paperless payday lenders target vulnerable people, such as low-income communities, emphasisingemphasizing the ease of getting a loan regardless of the target audience being vulnerable and unfamiliar with the repaying process and charging high interest rates.