LoansFinancial Glossary
Digital Lending
Definition
The process of providing loan products through online platforms and apps, often with minimal documentation and instant approval. RBI's Digital Lending Guidelines (2022) regulate this space, requiring that all loan disbursements and repayments flow directly between the borrower's and regulated entity's bank accounts, with full fee disclosure upfront.
Why It Matters
Digital lending has democratized credit access but also created risks. The RBI guidelines mandate that the lender's name, total cost, cooling-off period, and grievance mechanism must be disclosed before loan acceptance. Beware of unregulated lending apps that charge usurious interest rates (often 50-100% annualized) disguised as processing fees.