A Quick Guide To The Personal Loan Process
July 3, 2023

Are you dreaming of exploring the globe or envisioning your perfect wedding? Choose a Personal Loan and transform your dreams into reality.

Whether you need assistance to overcome a financial challenge, manage unexpected expenses, or pay off debt faster, a Personal Loan can provide the necessary support.

Regarding Personal Loans, there’s no need to worry about collateral or security since they are usually unsecured loans designed to provide financial assistance.

Banks focus solely on the eligibility and creditworthiness of the borrower for issuing an unsecured Personal Loan as for the borrower receiving funding via a Personal Loan is a quick and seamless experience, more so with the convenience of online processing.

Which Factors Determine Personal Loan Eligibility?

Here is The Personal Loan Eligibility Check

Typically, the borrower should fall within the age bracket of 18-21 to 60-65 years to meet the eligibility criteria.

Banks offer Personal Loans to salaried individuals employed in Government entities, recognised multinational corporations (MNCs), and public or private companies. Banks also offer Personal Loan facilities to self-employed applicants who can provide proof of business existence, income tax returns (ITRs), and other essential financial documents.

The applicants should provide the necessary KYC (Know Your Customer) and Income proof per the documents list.

The applicant’s income must be above the minimum required benchmark to meet the eligibility criteria required for a Personal Loan.

It is mandatory to have a specific duration of employment or business existence.

The CIBIL rating of the applicant is an essential criterion for Personal Loan approval a minimum score of 720 points is required by most lenders, with an on-time repayment record for all credit taken.

So when you apply for a Personal Loan, you must consider the above points to get the loan approved quickly.

Asses as to what is your loan requirement and repayment capacity?

The primary objective for both you and lenders is to ensure that you do not find yourself in a position where you obtain a personal loan and face the inability to meet the financial obligations for its repayment.

To steer clear of this situation, begin by assessing the amount of funds you will need while keeping in mind that specific lenders may also levy an origination fee.

Now, with the help of a Personal Loan Eligibility Calculator, determine the monthly payment amount for your loan. It can be challenging if you are not aware of the rates and repayment terms the lenders will provide. However, you can experiment with the numbers to estimate the potential cost of the loan and determine whether your budget can accommodate it.

Before Applying For a Personal Loan, inquire about any origination fee or upfront costs imposed by the lender to help determine the monthly payment you can comfortably afford.

Before deciding on any lender, you should thoroughly research to find the best per your need. To know more, Please Check Details of Primary Lenders.

What is the Process to Secure a Personal Loan?

For immediate financial needs, a Personal Loan provides swift access to funds. Personal Loans come with flexible payment options for up to 72 months. The terms and conditions may vary according to the profile of the customer and the loan amount approved. Here is a guide to understand how to Apply For a Personal Loan.

Which are The Documents for a Personal Loan Process?

Documentation forms the basis for processing a Personal Loan. Therefore, the applicant must provide complete, valid, and clear copies. Before the commencement of the application process, an Applicant should ensure the availability of the required documents to expedite the Personal Loan Process. Primary documents are standard for most lenders, which include the following.

KYC ( Know Your Customer)

Documents; These are mandatory documents that include:

Proof of Identity can be either: an Aadhaar card/Pan Car/ Driving License/Passport with a Passport size photograph.

Proof of the Residential Address where you reside: An Aadhaar card copy with the applicant’s current or permanent address has become mandatory for most lenders.

If the Aadhaar card reflects a permanent address, the applicant has to submit a current address proof valid document for the same, including Passport/ Driving License/ Voter ID or any other government-recognized document.

Signature Proof: A Pan Card or a Bankers’ verified proof is required to authenticate the applicant’s signature.

Income Documents: That will confirm the applicant’s monthly income to calculate the eligibility for the loan amount; valid income proof is to be submitted. These Include:

Salary slips for the last two months to know the monthly remuneration of the applicant and a Form 16 for proof of continuity.

A self-employed customer needs to submit the Income Tax Returns filed for the last three years

A Bank statement for the previous three months for the salary account of a salaried applicant and a self-employed applicant has to submit six months’ Banking of all Company and personal Bank accounts and proof of Business vintage. Most lenders demand own

hip proof for self-employed persons. It could be either the office or the residence.

Online/Offline Application

Once the documentation is in hand, you must fill out an application form for a personal loan. You can fill out the form online or offline by visiting the nearest branch of the Bank. However, when you apply for an Instant Personal Loan Online, you simplify the process and effectively save time. The details filled in the form must be accurate and match the documentation further, apply along with the documents for further processing.

Validation Of Documents

On receipt of the application, the Bank verifies the Documents and customer details and initiates a reference number. The applicant is informed of the file number via a Mobile SMS.

Credit Score Check

The Bank will next review your credit score and evaluate factors such as your repayment history, The CIBIL Score allotted must be above the required benchmark. There should be no delays or defaults in the applicant’s credit history.

Address Confirmation

A bank representative may conduct a home visit to verify the address provided in your application. Furthermore, suppose the applicant is unavailable at the home address. In that case, a neighbour check is done, or if the residence is rented, the landlord is asked to confirm the applicant resides at the given contact address.

Ownership proof is required if the residence is self-owned, which will expedite the verification processing.

The employer verification is waived if the applicant provides an email contact from the company domain. If not, a representative will visit the office premises to confirm the customer’s employment details.

The verification is more detailed for self-employed persons, with a Bank officer physically visiting the office premises to verify details and check the profile.

Digital Online Process

If you hold an account with the Bank, getting access to instant personal loan approval within seconds is quite convenient. This digital solution ensures a seamless and effortless borrowing experience, assisting customers in fulfilling their urgent financial requirements.

It is paperless and In1stant Online Personal Loan disbursal for saving account holders, so if you have an account with the Bank, you can visit the website and apply for a loan once it is approved, the amount will be disbursed in no time.

Loan Approval

With all the above checks conducted positively, the Underwriter can check if the applicant meets the Personal Loan Eligibility Criteria Requirements. A financial calculation confirms the existing credit and obligations and whether the applicant can comfortably pay the monthly instalment for the loan amount requested.

Loan Amount, Tenure, and Personal Loan Rates

  • Factors influencing the decision are the loan amount and terms sanctioned are
  • The monthly income
  • The Loan amount required
  • The employer category is as per the company category list of the Bank
  • The CIBIL score
  • Vintage of residence and office

On completion of the process, the essential terms and conditions of the Personal Loan are tabulated and communicated to the applicant. These include:

  • The Loan amount sanctioned
  • The Tenure for Repayment
  • The interest rate is applicable
  • The processing fees
  • The monthly EMI for repayment
  • Insurance charges if required

Disbursal Process

The customer accepts the lender’s Loan terms by signing an agreement; all other charges are notified to the applicant, such as the Foreclosure and Part payment terms and additional fees. At this stage, the customer must be aware of the notifications and forward queries, if any. The Personal Loan terms, once decided, remain fixed for the entire tenure.

The Loan amount is transferred to the applicant’s account by ECS (electronic clearing services). Subsequently, the installment is presented to the customer’s account on a designated date per the fixed term.

A loan schedule is dispatched with the number of EMI and the break up therein.

The Bank transfers the funds approved via a Personal Loan to the customer’s account within 72 hours of the application. Most Banks have adapted to digital processes where feasible and are streamlining processing further to make a Personal readily available when needed!

An understanding of the know-how of the Personal Loan process will help our esteemed clients to receive funds without any delays or glitches.

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