Dubai:  A bank in the UAE has implemented a paperless and instant loan facility that enables customers to borrow and access money online during emergencies, even in the middle of the night.

Eliminating paper handling in the processing of loan requests, Emirates NBD announced on Monday the launch of “InstaLoan”, said to be the first virtual loan facility in the region.

Through the programme, bank customers who are in need of immediate cash assistance can borrow money via online banking without any paperwork. All they need to do is log on to their online banking account and get the money in a matter of seconds.

“This online disbursal facility has been introduced to provide instant cash relief to customers, particularly in medical or other types of emergencies,” the bank said in a statement.

Preeti Bhambri, founder of personal finance website, said the instant loan facility is similar to an “overdraft limit in account.” It is more common in developed markets outside the region, such as the United States or United Kingdom, where loan approvals are largely dependent on the borrowers’ credit ratings.

“The paperless loan disbursement facility is a pre-approved line or credit for existing customers. At the time of availing this credit, a customer does not have to give his documents again as he would have already given these to get the line of credit approved in the first place. The pre-approved limit of the loan would also be affected by customer’s repayment behavior and capability,” Bhambri told Gulf News.

How it works

Each online banking customer is assigned a pre-approved loan amount, which is based on a number of factors, including monthly income, credit history and capacity to pay, among many others.

If the customer one day finds himself short of cash, he can just open his account online to get an instant loan.  An interactive screen then pops up, and all the customer has to do is choose to apply for the full or less than the pre-approved amount.

There are no required forms to print or fill out. With just a few clicks, or within seconds, the money can be disbursed.

“InstaLoan is another first-to market offering that will significantly benefit existing customers by providing instant funds in their account without additional paperwork at any time, no matter where they are in the world,” said Suvo Sarkar, senior executive vice president and group head, retail banking and wealth management, Emirates NBD.