1.1.

INTRODUCTION

Now a days, loans and loans occur every day in human life. Everyone may
have difficulty in needing urgent money. On the other hand, many people
would prefer to invest in another project or in a person with a higher return
interest, compared to a bank economy. According to a recent report from
the loan market, the use of online loans increased by 4.2% across the
financial market. Online loans are a convenient and fast option for
borrowing money. Online persona loans typically have annual percentage
rates between 6% and 36%. A key benefit of online loans is the ability to
prequalify and see personalized rates before applying. The online mode is
usually limited to the development of the loan platform through the
internet. Borrowers only need credit lines to borrow money as a
commitment. The borrowers request for loan, the investors amount input,
risk assessment, loan release, etc. are all based on the internet. The online
model copies the foreign pure intermediary model in order to create a good
credit environment to promote personal lending. Therefore, some insiders
said that if P2P is not online, then domestic P2P can be said to be in a
modeless state. The online model is still too risky for the current national
conditions.

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1.2-INDUSTRY PROFILE

The online small loan business refers to that the loan company, through the
network platform, uses technical methods such as data analysis, based on
the internal information of the system such as the daily transaction and
business data of customers accumulated on the online platform, and in
combination with other relevant information legally obtained from the
outside, makes a profound assessment on the credit status of the customers
applying for loans, and complete the approval of loan request, loan
granting and capital withdrawal through online risk identification, control
and prevention and other related business.

The online small loan business is convenient and efficient. It can realize
the online process and the loan application service platform is not limited
by time. The threshold of online loan business is low, so there is no
restriction on regional development, and the openness of loan business is
greatly improved. However, at the same time, the geographical distribution
of online small loan companies is uneven, and there is phenomenon that
the registered place and the source of customers are different. The number
of online small loan companies tends to be stable after a rapid increase in
the initial stage. Policies to strengthen the supervision of online small loan
business companies have been issued successively. In addition, may online
small loan companies have exited the industry due to the possible risks of
the newly issued policies.

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1.3. STATEMENT OF THE PROBLEM

A loan is sum of money given to an individual or institution on the

condition that it is paid for a given period of time with interest, and that
serve as a payment for the use of money. There are several type of loans,
such as loans, finances and mortgages. The manual lending and lending
process is stressful, impractical and time consuming for both the lender and
the borrower. It is necessary to automate as much as possible loan
processing process. The goal of this project is to design and create a loan
automation application software that can capture the required loan data
once, secure this information throughout the loan process and convert the
loan information system. Previous hand in hand to obtain and grant loans
in a less stressful computerized form, track people in the process, supervise
and track loans granted to allow better flow and improve compliance,
guarantee information security reduces the life of the loans, applies the
appropriate interest to the loan and informs the persons concerned of the
evolution of his loan.

1.4- OBJECTIVE OF THE STUDY

Primary Objectives

• To analyse the effect of online loan technology on individuals

Secondary Objectives

• To assess individual perception on the effectiveness of online loan.

• To analyse the relationship between access to loan and saving habit

of individual

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1.5-SCOPE OF THE STUDY

The study scope is limited to examining the impact of the online loan and
relationship between access to loan and saving habit of individual. The
study will focus on how the online loan effect the individuals. This study
will identify how the online loan is convenient to customers. The study will
be conducted using quantitative data collection methods. The quantitative
data will be collected through online survey. The study will target a sample
size of 50 consumers who have used online loan facility. The study will
find out how does the speed of online loan approval impact individuals’
decision-making and transparency of online loan platforms.

1.6 –RESEARCH METHODOLOGY

Research methodology refers to the collection of practical decisions

regarding what data you’ll collect, from who, how you’ll collect it and how
you’ll analyse it..

1.6.1- RESEARCH DESIGN

It is a descriptive research design. Descriptive studies are designed

primarily to describe what is going on or what exist. Descriptive designs
are concerned only with the existing or current forms of the problem. In
descriptive designs, hypothesis is formulated on the basis of the description
of the existing data or material.

1.6.2-SOURCE OF DATA

Both primary and secondary data will be used for the study. Primary data
will be collected through questionnaire. Secondary data will be collected
from internet, journals, magazines, and books.

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• Primary data

The primary data have been collected through the survey method from the
customers using the Questionnaire.

• Secondary data

The secondary data was collected from various websites and journals.

1.6.3- TOOLS FOR ANALYSIS

Percentage Analysis: Frequency distribution gives the number of cases in

each group. A relative frequency distribution, on other hand, gives also the
proportion of cases in individual cases. Converting data into percentage
has the following advantages:

• The data become more intelligible.

• It facilitates comparison as percentage can standardise the data.

Percentage = (No of respondents )/ (Total No of respondents)*100

1.6.4- TOOLS FOR PRESENTATION

Diagrams such as Simple Bar Diagram, Pie Chart, and other charts were
employed for presenting the Data.

• Pie chart :A pie chart is a type of graph representing data in a

circular form, with each slice of the circle representing a fraction or
proportionate part of the whole.
• Bar diagram: It is a graphical representation of data using bars of
different heights.

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1.6.5- SAMPLE SIZE

The Data collected through structured questionnaire from 50 samples are

analysed carefully and interpretations are made accordingly.

1.6.6- PERIOD OF STUDY

Twenty-one days of study.

1.7- LIMITATIONS OF STUDY

• If the study relies on a specific group of individuals or a particular

demographic, the findings may not be representative of the broader
population.
• Reliance on self-reported data may introduce bias, as individuals
might provide socially desirable responses or may not accurately
recall their experiences with online loans.
• Short-term studies may not capture the long-term effects of online
loan technology on individuals’ financial behaviour and well-
being.
• Cultural differences in attitudes towards borrowing and technology
can influence how individuals perceive and utilize online loan
services, affecting the study’s generalizability.
• Variations in individuals’ technological literacy can impact their
ability to adapt to and utilize online loan technologies, influencing
the study’s outcomes.

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 REVIEW OF LITERATURE
Mora Saritha (2023), Her article state that “The loan app
Operators leveraged the gaps in the regulatory system to override

Their business coupled with the dire need of people to raise easy

Finance via loan apps. This paper aims to explore the RBI (Reserve

Bank of India), the regulatory body for the supervision and control

Of the banking system of India, guidelines on digital lending, and

Provide precautions to whosoever wants to avail finance through

Digital loans.”

Natanael Steven Kurniawan, Muammar Azhim Tohepaly,

Anderes Gui, Muhammad Shabir Shaharudin Yuvaraj

Ganesan (2023), their results show that “perceived security, service

Quality and system quality were not critical to the respondents

When choosing online loan applications while perceived risk,

Information sharing, and privacy concern were critical. General

Public believed that security and quality are part of the package

When organization offered a product or service. Interestingly, while

Privacy, risk, and information are important, public felt that it is

The duty of organization to take care of their interests. Future

Research should look into behavioural aspects of public risk,

Information sharing, and privacy concern to understand in-depth.”

Emanuel Ristian Handoyo (2023), the results of the study found

That “More comprehensive new regulations were needed to keep

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Pace with the rapid development of technology in the financial

Sector. The findings of this study emphasize the importance of

Protecting personal data in applications that offer online loan

Services, especially with the increasing number of cases of

Breaches of personal data. The results of the study conclude that

Updating personal data protection regulations is very important to

Ensure the security and safety of consumer data in applications

That offer online loan services.”

Divya Ramesh, Vaishnav Kameswaran, Ding Wang, Nithya

Sambasivan (2022), Their studies state that “Users demonstrated a

Dependence on loan platforms by persisting with such behaviours

Despite risks of harms such as abuse, recurring debts,

Discrimination, privacy harms, and self-harm to them. Instead of

Being enraged with loan platforms, users assumed responsibility

For their negative experiences, thus releasing the high-powered

Loan platforms from accountability obligations.”

Khakan Najaf, Ravichandran K Subramaniam, Osama F Atayah

(2022), their studies state that “Many banks and financial

Institutions have offered online loan application services during

The COVID-19 pandemic, few have developed verification of loan

Applications submitted online. The results of this study show that

The COVID-19 has brought a drastic change in the key determinants

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Of P2P lending. The results imply that FinTech P2P lending has

Become the most viable alternative credit option available to

Borrowers. The findings are significant and likely to be of interest

To borrowers, investors, practitioners, academics, and policymakers

Because they highlight the usefulness of P2P lending platforms and

Their potential to augment or replace lending provided by

Traditional or conventional banking institutions.”

Ajay Kumar Goel (2022), His article state that “A new type of fraud

Has been started which is going on with the help of loan apps. The

Trend of using loan apps has been started during the period when

People are supposed to stay at home during pandemics due to fear

In the society of any unfortunate happening in life, which created a

Situation of financial crunch. The started trend looks promising but

It turns out to be frustrating for customers who later on lodge

Various types of complaints including criminal complaints in a

Compelling situation of unethical practices, against the money

Lenders who are providing loans through these apps.”

Collins W Munyendo, Yasemin Acar, Adam J Aviv (2022), Their

Article state that “The usage of mobile loan applications has

Proliferated in developing countries. This is due to the ease and

Speed in which they disburse small loans to users, compared to

Traditional financial institutions, such as banks, that only offer

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Similar loans based on existing customer relationship or collateral.

As mobile loan apps are a relatively new industry, these apps are

Mostly unregulated and therefore tend to charge extremely high

Interest rates. Further, they collect and sometimes misuse sensitive

User data through the course of verifying customers and ensuring

Loan repayment, such as users’ contacts and SMS communications

Through the mobile device permission system.”

Srinadh Swamy Majeti, Barnabas Janet, Narendra P

Dhavale (2022), their studies state that “As the globe increasingly

Focuses on mobility and digitalization, India’s digital banking sector

Is poised for development. At the same time, cybersecurity seems to

Have taken a back seat. Recently, the Indian government busted a

Multi-crore money lending loan app scam involving non-regulated

(Unauthorized) Chinese apps offering instant loans in the digital

Lending platform. Many people were trapped by these Chinese-led

Loan apps and dozens of people committed suicide. These apps steal

Customers’ data on mobile, resulting in harassment through

Blackmailing the customers who fail to pay instalments.”

Ichsan Nur Ramadhan, M Bilal Abiyoso (2022), this study was to

Determine “The effect of online loan advertisements on social

Media for borrowing families in the Cinere District. This study uses

A descriptive method aimed at describing and analyzing so that the

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Situation that becomes the research theme can be explained

Clearly. The population in this study is a family of researchers who

Have experience in making online loans.”

Central European Management Journal (2022),” Online loans

Are credit problems, especially in the online loan handling system

Itself, but the government is currently controlling these online

Loans, in online loans there is mutual interest between the lender

And also, the borrower because the rules clash between interest and

Fines. The borrower (debtor) feels disadvantaged if there is a delay

In paying off interest or the loan is always from the provider

(Creditor) of funds terrorizing in terms of collecting and

Threatening him, because the interest is always daily and doubled

Interest which is burdensome to the borrower. The purpose of this

Study is to provide legal protection for debtors to carry out online

Loans, where the debtor’s personal data is often misused by

Creditors, in this case online loan providers. “

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 TABLE 3.1

3.1 What is the purpose of taking online loan?

Options No. Of Respondents Percentage

Personal 38 76

Educational 8 16

Housing 1 2

Vehicle 3 6

Total 50 100

(Source :Primary data)

Percentage

2%6%
16% Personal loan
Education loan
Housing loan
Vehicle loan
76%

INTERPRETATION: The above pie chart shows that, most of the

respondents are taking online loan for Personal purpose.

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 TABLE 3.2

3.2 Have you maximised the use of the credit you gave taken?

Options No. Of Respondents Percentage

Yes, I have fully 33 66

utilized

No, I haven’t used all 13 26

I have used significant 3 6

portion

I’m uncertain about 1 2

credit utilization

Total 50 100

(Source : Primary data)

70%

60%

50%

40%

30%

20%

10%

0%
Yes, i have utilized the No,i have't used all of I have used significant I'm uncertain about
credit the available credit portion but not all the credit utilization

INTERPRETATION: The above bar chart shows that, most of the

respondents fully utilized the credit.

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 TABLE 3.3

3.3 Reason for choosing online loan?

Options No. Of Respondents Percentage

Low interest rate 3 6

Quick approval 12 24

Easy to apply 34 68

Good relation with 1 2

Customers

Total 50 100

(Source: Primary data)

Percentage

2%6%

Low interest rate

24%
Quick approval
Easy to apply
Good relation with customers
68%

INTERPRETATION: The above pie chart shows that a most of the

respondents choose online loans due to the easy to application.

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 TABLE 3.4

3.4 When was the last time you took an online loan?

Options No. Of Respondents Percentage

Before 30 days 5 10
Before 90 days 7 14
Before 6 months 7 14
Above 6 months 31 62
Total 50 100
(Source: Primary data)

Percentage
70%

60%

50%

40%

30%

20%

10%

0%
Before 30 days Before 90 days Before 6 months Above 6 months

INTERPRETATION: The above bar chart shows that, most of the

respondents take an online loan more than six months ago.

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 TABLE 3.5

3.5 How do you normally remind yourself to pay back the loan?

Options No. Of Respondents Percentage

I wait for sms remind 12 24

from the providers

I set my own reminder 26 52

I pay back as soon as I 10 20

have enough money

Intimation through 2 4
e-mail

Total 50 100

(Source: Primary data)

Percentage

I wait for the sms reminder from

4% the provider
20% 24%
I set my own remainder

I pay back as soon as I have

enough money
52% Intimation through email

INTERPRETATION: The above pie chart shows that, most of the

respondents prefer setting their own reminders for online loan payment.

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 TABLE 3. 6
3.6 What have you experienced as a result of default in repaying a loan that
you took through your phone?

Options No. Of Respondents Percentage

An extra fee 28 56

Reduction in future 11 22

loan limit after

repaying

Blacklisted at the 3 6

credit bureau

Legal prosecution 8 16

Total 50 100

(Source : Primary data)

Percentage
An extra fee

16%
Reduction in future loan
6% limit after repaying
56% Blacklisted at the credit
22% bureau
Legal prosecution

INTERPRETATION: The above pie chart shows that, Half of the

respondents are concerned about incurring an extra fee.

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 TABLE 3.7

3.7 Have you ever contacted anyone, such as customers care, an agent, or
police, to compliant about online loan?

Options No. Of Respondents Percentage

Yes 38 76

No 12 24

Total 50 100

(Source: Primary data)

PERCENTAGE
Yes No

0%
24%

76%

INTERPRETATION: The above pie chart shows that, most of the

respondents are complaint about the online loan.

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 TABLE 3.8

3.8“Online loan encourage the saving habits”, do you agree?

Options No. Of Respondents Percentage

Strongly agree 2 4

Agree 33 66

Disagree 11 22

Strongly agree 4 8

Total 50 100

(Source : Primary data)

Percentage

8% 4%
Strongly agree
22% Agree
Disagree

66% Strongly disagree

INTERPRETATION: The above pie chart shows that, most of the

respondents agree that online loan encourage the saving habits.

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 TABLE 3.9

3.9 “Online loan application is approved too fast”, do you agree?

Options No. Of Respondents Percentage

Strongly agree 3 6

Agree 27 54

Disagree 15 30

Strongly disagree 5 10

Total 50 100

(Source: Primary data)

PERCENTAGE
Strongly agree Agree Disagree Strongly disagree

10% 6%

30%

54%

INTERPRETATION: The above pie chart shows that, Half of

respondents agree that online loan approved too quickly.

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 TABLE 3.10

3.10 Do you agree that online loan is fraudulent?

Options No. Of Respondents Percentage

Strongly agree 4 8

Agree 3 6

Disagree 42 84

Strongly disagree 1 2

Total 50 100

(Source: Primary data)

Percentage

2% 8%
6%
Strongly agree
Agree
Disagree
Strongly disagree
84%

INTERPRETATION: The above pie chart shows that, most of the

respondents are said the online loan is not fraudulent.

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 TABLE 3.11

3.11“Online loan KYC uploading is safe”, do you agree?

Options No. Of Respondents Percentage

Strongly agree 3 6

Agree 6 12

Disagree 16 32

Strongly disagree 25 50

Total 50 100

(Source:Primarydata)

PERCENTAGE

6%
12%
Strongly agree
Agree
50%
Disagree
32% Strongly disagree

INTERPRETATION: The above pie chart shows that, Half of the

respondents strongly disagree with the notion that online loans are safe.

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 TABLE 3.12

3.12 How does the speed of online loan approval affect your decision?
Options No. Of Respondents Percentage
Essential 35 70
Somewhat important 7 14
Not a significant factor 6 12
Unsure 2 4
Total 50 100
(Source: Primary data)

Series 1
80%

70%

60%

50%

40%

30%

20%

10%

0%
Essential Somewhat Not a significant factor Unsure

Series 1

INTERPRETATION: The above bar chart shows that, most of the

respondents consider the speed of online loan approval to be essential in
their decision-making process.

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 TABLE 3.13

3.13 How important is transparency in shaping your view of online loan

platforms?

Options No. Of Respondents Percentage

Extremely important 30 60
Moderately important 9 18
Not very important 8 16
Unsure of its impact 3 6
Total 50 100
(Source: Primary data)

Percentage
70%

60%

50%

40%

30%

20%

10%

0%
Extremely important Moderately important Not very important Unsure of its impact

INTERPRETATION: The above bar chart shows that, most of the

respondents said that the transparency is extremely important in online loan
platforms.

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 TABLE 3.14

3.14 What are the risk factor associated with the use of online loan
technology?
Options No. Of Respondents Percentage
Data breaches and 7 14
identity theft
Predatory lending 7 14
practices
Limited transparency 6 12
in loans terms and
conditions
Increased 30 60
susceptibility and
fraudulent activities
Total 50 100
(Source: Primary data)

Percentage

Data breaches and identity

14% theft
Predatory lending practices
14%

60% Limited transparency in loans

12% terms and conditions
Increased susceptibility and
fradulent activities

INTERPRETATION: The above pie chart shows that, most of

respondents are primarily concerned about increased susceptibility to
fraudulent activities in online loans.

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 TABLE 3.15

3.15 Have you recommended online loans to friends or family?

Options No. Of Respondents Percentage

Yes 19 38
No 31 62
Total 50 100
(Source: Primary data)

Percentage
70%

60%

50%

40%
Series 1
30%

20%

10%

0%
Yes No

INTERPRETATION: The above bar chart shows that, most of the

respondents do not recommend online loan to friends or family.

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 FINDINGS

The study was conducted how the online loan is effect individuals. The
major findings, suggestions, conclusions are Explained below

• Online loans are predominantly used for personal purposes, with

respondents fully utilizing the credit obtained.
• The ease of application is a significant factor in respondents’
choice of online loans, and a majority took these loans more than
six months ago.
• Respondents prefer setting their own reminders for online loan
payments, but half express concern about potential extra fees.
• Complaints about online loans are voiced by a majority of
respondents, even though most agree that they encourage saving
habits.
• Concerns about the safety of online loans are notable, with half
strongly disagreeing that they are safe.
• The speed of online loan approval is crucial in decision-making for
most respondents, emphasizing the need for a swift process.
• Transparency is deemed extremely important in online loan
platforms by most respondents.
• Respondents are primarily concerned about increased susceptibility
to fraudulent activities in online loans, demonstrate a reluctance to
endorse this financial option to friends or family, reflecting
reservations based on their own experiences.

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 SUGGESTIONS

• Most respondents strongly disagree that online loans are safe,

consider addressing their concerns by providing transparent
information about security measures, encryption protocols, and
user data protection. Offering testimonials or case studies of
successful and secure transactions can also help build trust.
Additionally, actively engaging with users to understand their
specific concerns and addressing them directly may help improve
the perception of online loan safety.
• Most respondents don’t recommend online loans to friends and
family, it’s crucial to address their reservations. Consider
improving communication about the benefits, transparent terms,
and customer support. Implementing user-friendly interfaces, clear
repayment plans, and fair interest rates can enhance the overall
experience. Gathering feedback to identify specific concerns and
actively working to address them can contribute to building trust
and increasing the likelihood of positive recommendations.
• Most of the respondents are complaint about the online loan. So,
implement a robust customer support system to quickly address
issues and provide timely assistance. Enhance transparency in
terms and conditions, ensuring users fully understand the loan
process. Consider improving communication channels to keep
users informed about their loan status, payments, and any changes
in policies. Regularly collect and analyse feedback to identify
common issues and actively work on resolving them to improve
overall customer satisfaction.
• Most of the respondents are associated with the risk is increased
susceptibility and fraudulent activities. So, Implement multi-factor
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authentication, regularly update security protocols, educate
customers on recognizing and reporting suspicious activities, and
conduct periodic reviews of your fraud prevention strategies to
enhance overall protection.

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 CONCLUSION

The show that, online loans are popular for personal reasons, respondents
often fully utilize their credit and appreciate the ease of application.
However, a significant portion last took out a loan more than six months
ago, and many set their own reminders for repayment. Experience with
defaults and complaints about online loans exist, with concerns about
safety and transparency. Despite fast approval and perceived non-
fraudulent nature, respondents are cautious, as reflected in a reluctance to
recommend online loans to friends or family. Overall, the findings indicate
a mixed sentiment towards online loans, emphasizing the importance of
addressing concerns related to safety, transparency, and customer
experience.

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