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August 15, 2025
Before approving a personal loan request, the credit officer of the personal loan lenders, such as ICICI and HDFC Bank, will make a telephone call to verify information based on the application form and submitted documents. This might seem like a pre-functionary call to correlate the details given, but the importance of the call should not be underestimated; it could turn the tables for or against your favour.
To avoid facing a decline, let us explore further the questions asked to make your personal loan journey smooth and successful.
One of the essential questions asked by a bank’s underwriter when granting a personal loan is, “What is the amount required and the end usage of the personal loan requirement?” as the timely repayment of EMI is the primary focus of the lender.
Valid reasons for applying for a personal loan include: Home renovation, weddings, family functions, travel and holidays, education expenses, payment of hospital bills, and other medical emergencies.
Expenditures for investment or business usage could lead to misappropriation of funds. Similarly, you cannot use a personal loan for purchasing land or to start a new venture, where there is a monetary risk factor involved.
Let us check out this example to understand this further:
Profile of the customer applying for a personal loan: Aman Sharma, an IT executive at a prominent software firm, applied for a personal loan of ₹ 8 lakhs from HDFC Bank. He maintained a salary account with HDFC Bank, earning a monthly income of ₹ 80,000/-. His CIBIL score was excellent, and he was paying a home loan EMI of ₹ 15000/-. His company is classified under category B of the HDFC Bank company list, and with no outstanding credit card dues, he remains hopeful of securing the loan.
The primary need for funds was for the renovation of his new home, and he had applied for a surplus amount to cover any shortfalls.
Aman was a bit preoccupied at the time of the call and explained that the amount was needed for the renovation of his new home, and he had applied for additional funds, which he would invest in mutual funds if not used. Soon after, he received a message that his loan request had been declined. Although investing in mutual funds was not the actual end use, a mention alerted the Credit officer, who was not convinced about the appropriate usage of funds, which led to the decline.
When you apply for instant personal loan online to ICICI Bank, you need to fill in the application form and submit supporting income and KYC documents. The information filled in the form must match the documents given. You will be asked to verify the same.
The amount granted as a personal loan is based on your monthly income. The net income should easily cover your monthly expenses.
The credit officer will ask you to confirm your income for a personal loan eligibility check, as the EMI for repayment of the loan is calculated with the regular income credits in your Bank account. If you have an alternate source of income, proof of the same must be submitted.
The salary depicted in your salary slip must match the credit in the Bank statement. If there are any discrepancies, for example, if the salary is deducted for a particular month, you will be asked to provide a reason for this with the documentary proof.
Apply for a loan amount that can be repaid conveniently. Suppose the credit manager feels that your income is insufficient or that the balance maintained in your bank account is not enough to support the EMI, you may not receive the loan amount required, or you may be asked for an alternate account if available with a sufficient balance.
Equally important is work stability, which ensures your income is consistent and allows you to pay your personal loan instalment regularly. The credit officer will ask you about your employment history to understand your track record.
Employment with a Category A company, according to the HDFC Bank company category list, reassures the credit manager that you have steady employment and your salary will be credited on the due date, enabling the EMI to be cleared. Whereas if you are employed with a private limited company, you will be questioned about your work history.
The salary slip usually displays the date you joined the company; if the joining date is missing, you will be queried about it and required to provide the appointment letter or Form 16.
The total work experience required for a personal loan is at least 12 months. If you have been in the present organisation for less than a year, you may be asked to provide documentary proof of the previous organisation.
Completion of the KYC details is a necessary mandate issued by the Reserve Bank of India. Your KYC documents must be updated, with clear copies available for the personal loan application online. With the online KYC process becoming popular, your Aadhaar card and PAN card must be legible during the video KYC process.
A personal loan is unsecured funding issued for a limited tenure, without any security or guarantees; therefore, the customer must be easily reachable.
The information given regarding your residence address must be authentic, as there will be a physical verification conducted at the residence.
A self-owned or family-owned residence adds bonus points to your application as it ensures the applicant can be easily contacted, whereas an applicant shifting from rented residences may be harder to contact and so will not be issued a higher loan amount. Applicants living in rented accommodation will be asked for permanent address details, and if need be, documentary evidence will be required.
The applicant must be living at the current address. For instance, an applicant residing in office-provided accommodation and giving his Parents’ home is not acceptable as his current address, and this will be clarified during verification.
Our family is an integral part of our system; an applicant living with a family has the security and support of the family, as compared to a bachelor and the personal loan request is considered more favourably.
The number of members in your family will also affect the monthly budget; on the other hand, other earning family members will contribute to your financial standing. The credit manager will account for your financial responsibilities versus your income when issuing the amount required as a personal loan.
Suppose you specify in the form that you are married, and upon verification of your residence address, it is proven that you are residing in a bachelor’s accommodation. In that case, your application may be withheld until you provide the relevant proof.
The credit officer of the Bank will study your credit history retrieved from the Transunion CIBIL (Credit Bureau of India Ltd) to check your past credit dealings and the secured and unsecured credit availed, including home loans, credit cards, personal loans, and auto loans. By viewing your credit history, the officer of the Bank will have a keen understanding of how you manage credit. Significant questions asked regarding credit include:
As per the new Reserve Bank of India ruling, your credit inquiries are immediately reported to the Credit Bureau. The number of recent credit inquiries must not exceed 5, according to the ICICI Bank eligibility check, as excessive inquiries give the impression that the applicant may be applying for multiple credits in the form of credit cards or personal loans from other lenders, which may be challenging to repay.
The existing EMI you are paying and the credit cards being used are displayed in your credit information report. If there are any defaults in the history or pending accounts, you may have to explain the cause for the same. Any bounces in the past three months of repayment for credit will lead to a decline in the request.
The credit history will reflect the balances of loans and credit cards you are using. If there are any pending credit card bills, you will be asked to clear them before the fresh loan amount is approved. The loans with six or fewer EMI payments pending will not be considered when calculating your personal loan eligibility.
An applicant with a high CIBIL score of 750 or above is the best CIBIL score for loan. Applicants with an on-time repayment history of credit taken will be provided the lowest personal loan interest rates.
You also have the opportunity to explain to the credit officer if there have been any wrong entries in your credit history and the action being taken to verify the same.
The CIBIL of the spouse and the parents is also checked by the HDFC Bank credit team, particularly when disbursing large loan amounts. If there is a default on credit taken, this will affect the applicant’s personal loan approval status.
Finally, you will be asked about the amount of funds required as a personal loan. It is a good idea to check your EMI in advance using the personal loan EMI calculator and apply for the amount you need and can easily repay.
The personal loan amount is sanctioned, taking into account your income, profile, the existing EMI, and your credit card dues. Although the formula applicable is as per the lender’s policy, the underwriter decides the amount approved as a personal loan after reviewing the application, assessing the profile as satisfactory and speaking to the applicant.
With all the documentary evidence of your financial history and credit transactions readily available online, it is in your best interest to provide accurate information, as any discrepancy can raise suspicion and mistrust.
For example, the underwriter asked Ganesh to forward his credit card statement as the bills seemed unusually high. Upon reviewing the statement, the officer denied his loan request as he noticed that Ganesh had made numerous purchases on Gaming Apps.
There is no manual for the questions you will be asked when applying for a personal loan, and it will depend on your individual case history. As the credit officer is experienced in asking the required questions before issuing a personal loan, answer transparently and attentively to get your personal loan approved.
