Key Highlights:
- Digital-first NBFCs saw their personal loan portfolio grow 28% year-on-year to ₹1.54 lakh crore by June 2026.
- The number of outstanding accounts fell slightly, while the average outstanding balance per account increased by nearly 30%.
- New personal loan sanctions by digital NBFCs rose 50% year-on-year in the June quarter.
- Borrowers below 35 accounted for 58% of the amount sanctioned by digital NBFCs during the quarter.
- For loan DSAs, easier digital access means the focus needs to move towards eligibility guidance, lender comparison, documentation and helping customers understand the loan before they apply.
Digital lending is becoming a much bigger part of how people borrow in India.
According to , the personal loan portfolio of digital-first NBFCs grew 28% year-on-year to ₹1,54,195 crore by June 2026. Interestingly, the number of outstanding accounts actually declined slightly from 5.69 crore to 5.64 crore. The average outstanding amount per account increased from around ₹21,100 to ₹27,350.
For loan DSAs, this changes the customer conversation. A borrower can already start an online loan application without speaking to anyone. So, simply helping someone fill a form is no longer enough.
The real value comes before that point: understanding the customer, finding suitable lenders and making sure the borrower knows what they are applying for.
Why Is Digital Lending Growing So Fast In India?
Digital lending is growing because customers can now access credit faster and from more locations. Also the youth of India is looking for better and quicker sources of loan that can reduce the commute and process time. The detailed view is as follows:
1. Younger Borrowers Are Using Digital Credit More
Customers below 35 accounted for 58% of the amount sanctioned by digital NBFCs during the quarter. Among borrowers below 25, sanction value more than doubled year-on-year.
These customers are already comfortable comparing products online. By the time they speak to a DSA, many may have checked rates, loan apps or EMI options themselves.
2. Digital Lending Is Reaching Beyond Large Cities
Around 40% of digital lenders' sanction value came from borrowers in Tier III cities and beyond.
This gives DSAs a much wider market to work with, especially when the application itself does not depend on a branch visit.
What Is Changing In The Way Borrowers Take Digital Loans?
Borrowers now expect speed, easy document submission and quick updates when they apply for credit online.
At the same time, the latest numbers show that digital lending is not only about very small-ticket loans. The average sanctioned personal loan increased to ₹18,802 in the June quarter, compared with ₹16,282 for FY26.
For a DSA, this means customers may come with very different expectations. Someone looking for an instant digital loan will need quicker loan with easy processing.
The discussion should therefore begin with a few basic questions:
- How much does the customer need?
- Why do they need it? What existing EMIs are running?
- And how quickly is the money required?
These answers give much more direction than simply starting another application.
What Should DSAs Check Before Starting An Online Loan Application?
Before an online loan application is submitted, the DSA should understand whether the customer broadly fits the available lender options.
A quick check can save both the customer and advisor from spending time on an application that was unlikely to move ahead.
1. Income And Employment
Check whether income is regular and whether the customer can provide the documents required by the lender.
A salaried borrower and a self-employed borrower will usually have different documentation requirements.
2. Existing Debt
Ask about current EMIs, credit card dues and other loan commitments. This will give you an idea of the money that the customer is having to actually spend more.
3. Credit History
Recent repayment delays or several loan enquiries in a short period are worth understanding before another application is made.
The idea is to know the customer better before deciding where the file should go.
Quick Digital Loan Check
| Check | What To Look At |
|---|---|
| Income | Regular and easy to verify |
| Existing loans | Current EMI commitments |
| Credit history | Repayment record and recent enquiries |
| Loan amount | Whether the requirement looks realistic |
| Documents | KYC, income and banking records are available |
How Can DSAs Add Value When Borrowers Can Apply Online Themselves?
DSAs can add value by helping customers make sense of the options they find online.
A borrower can find an instant digital loan within minutes, but that does not necessarily tell them which lender suits their profile or what the loan will cost over its full tenure.
1. Help Compare Relevant Lenders
Do not start with every lender available. Compare the profile of applicant and see the best possible match
2. Explain The Complete Cost
Customers often notice the EMI first. The DSA should also bring attention to the applicable interest rate, processing fee, tenure, prepayment terms and any other charges linked to the loan.
3. Help With Documents
Missing or inconsistent documents can slow down a digital process as easily as an offline one.
Helping the customer get the paperwork right before submission remains useful even when the rest of the journey happens online.
For advisors handling customers across different lenders, the Choice Connect platform provides access to multiple financial products through one place.
How Can DSAs Help Clients Avoid Unsuitable Digital Loan Options?
The easiest loan to access may not always be the most suitable one for the borrower. Digital lenders serve a wide mix of customers. report shows that borrowers in high and very-high-risk score bands accounted for 29% of digital NBFC sanction value, compared with 9% for banks.
1. Check Whether The Loan Solves The Actual Need
If the customer needs a larger amount or longer repayment period, a small short-tenure loan may not solve the problem properly.
2. Avoid Applying Everywhere At Once
Apply only at the place which matches the best. If you apply at multiple locations, you might face issues and if applicant is rejected the credit history will get impacted.
3. Set Expectations Around Speed
Digital does not automatically mean immediate approval. The lender may still need to assess eligibility, credit history and documents. Customers should know this before assuming that starting the application means the loan is confirmed.
How Can Loan DSAs Use Digital Lending Growth To Build Better Business?
Digital lending gives DSAs access to a wider customer base, but it also makes basic application support easier for customers to do themselves.
The opportunity is to become useful at the points where borrowers still need clarity.
That means understanding the profile before applying, comparing lenders, sorting documents and explaining what different offers actually mean.
Choice Connect allows advisors to become a personal loan DSA and work with partner banks and NBFCs while using digital registration, lead tracking and support tools.
As digital lending grows, the advisor who understands the customer properly can remain relevant even when the entire application happens online.
Conclusion
Digital lenders are growing quickly, and the numbers show that larger loans and younger borrowers are becoming an important part of that growth.
For DSAs, the change is straightforward. Customers no longer need an advisor simply to access a loan application. They need help deciding where to apply, what to compare and whether the available loan actually fits their requirement.
That is the part of the digital journey where a good DSA can still make a clear difference.
FAQs
1. What Is An Instant Digital Loan?
An instant digital loan is a loan where much of the application, eligibility check and document process happens online. Final approval and disbursal still depend on the lender's assessment.
2. What Documents Are Usually Needed For An Online Loan Application?
The common documents needed are the customer kYC, income documents, credit history, and work status linked documents.
3. Can A DSA Help With A Digital Loan Application?
Yes. A DSA can help the borrower understand lender options, and find which digital platform or loan application is the best choice for the applicant.
4. Are Digital Loans Available Only In Large Cities?
No. Digital lending is an option that is applicable to everyone. You can apply for the loan from anyplace including tier 2 and tier 3 cities.
5. Does Applying Online Guarantee Faster Loan Approval?
No. Online processing helps reduce the steps and saves time but there is no guarantee of approval.
