Lending: The What, Who and How

Gone are the days when borrowing money meant turning to friends, family, or pawning valuables in times of need. Today, both personal and business loans are easily accessible, swiftly approved, and offer flexible repayment options. Modern digital lending platforms have transformed the borrowing experience by removing traditional hurdles and eliminating the need for physical visits, saving you time and making access to funds quicker, safer, and stress-free.

What is Lending?

Lending is when you borrow money from an authorised financial entity, and you agree to pay it back, usually along with an extra amount called interest. The borrowing of a loan is done through regulated financial entities as the loans are provided by them. A loan is money you borrow to cover an expense and agree to pay back over time with interest. This makes it easy to manage your finances without having to wait to make a purchase. Whether it’s for an emergency, a big purchase, or even to start a business, loans help you get the funds you need quickly. 

Types of Lending 

There are many different types of lending based on the purpose of the loan. We will cover two types in this blog. 

1. Unsecured Lending: These loans don’t require you to pledge any assets as collateral. This includes personal loans and business loans. Personal loans are for individuals who need financial help for personal reasons like weddings, moving to a new city, emergency medical care, etc. Business loans cater to businesses that may need additional funds to scale up or manage operations.
3. Secured Lending: It is a type of loan that is backed by collateral; something valuable that the borrower owns, like a car, property, gold, or mutual funds. 

Who is a Lender?

A lender is a regulated and authorised financial institution that lends money to  eligible borrowers. When an individual applies for a loan, the lender assesses the applicant’s creditworthiness and conveys the best loan offers available for them. Banks and NBFCs are common lenders.

How do you choose the right Loan?

When selecting a loan, consider these factors:

1. Purpose: Identify whether the loan is for personal or business needs. If you need a loan for your personal needs, you can simply head to the Loans section on the PhonePe app (steps in the next section), apply in a few simple steps, and get your loan quickly and safely. If, on the other hand, you are a PhonePe registered merchant and are looking for a business loan, you can follow a similar process to avail a loan safely and easily on the Loans section under the PhonePe Business app. PhonePe Lending Services Private Limited (PhonePe Lending) facilitates the offering of eight major loan categories allowing you to find the perfect fit for your needs:

• Personal Loans: For any personal financial need, like medical bills or travel.
• Loan Against Mutual Fund: Use your mutual fund investments as collateral for a loan
• Gold Loan: Use your gold as collateral to get a loan.
• Bike Loan: You can get a loan to buy a new or used bike. 
• Car Loan: You can get a loan to buy a new or used car. You can also get a loan against your existing car.
• Home Loan: For buying a house for yourself.
• Loan Against Property: Use your property as collateral to get a loan for personal needs.
• PhonePe Business Loans: For any business operational needs.
  

2. Interest Rate & Fees: Choose the offer or interest rate that works best for your financial situation. At PhonePe Lending, we’ve partnered with India’s leading banks, NBFCs, and their loan service providers to create a secure loan borrowing experience. They offer competitive interest rates, flexible EMIs, and a variety of loan options. Also, make sure you look for any all applicable charges like processing fees, penalty fees, foreclosure charges, etc.
   
3. Loan Tenure: Choose a repayment period that fits your financial situation.

Please note: The loans are provided by the lenders and are subject to their approval. 

How to Apply for a Loan on PhonePe

1. Open the PhonePe app and navigate to the Loans section.
2. Select your desired loan category.
3. Select the type of loan  
4. Choose the best offer suitable for you and start the application process.

How to Apply for a Business Loan

1. Open the PhonePe Business app.
2. Tap Get Loan in the banner displayed on your PhonePe Business app home screen. 
3. Choose the best offer suitable for you and start the application process.

Whether you need a loan against gold, mutual funds, or property, or financing for a new bike, car, or home—PhonePe Lending makes getting a loan seamless, fast, and secure. Join millions who have already accessed hassle-free loans. Visit the Loans section on the PhonePe app today to apply effortlessly and get the funds you need in just a few taps!

*Data as of May 2025

Disclaimer: Opinions expressed and information provided here are for educational and reference purposes only and are not to be considered as financial or legal advisory. Please reach out to your financial institution, Credit Information Companies, and/or financial advisor before taking any steps/actions. PhonePe Lending does not confirm or warrant for any correctness or validity of the information provided here under independent research. The banks and lenders are not responsible for any content posted on this site and do not endorse or guarantee any reviews. All the loans are provided by the partner lenders alone and PhonePe Lending is not responsible for approval/rejection of loans and/or terms of the loan facility.