A personal loan is an unsecured loan that’s preferred by borrowers of all segments for its easy approval process. Instant personal loans have simple eligibility and minimal document requirements. There is no collateral associated with these loans which further simplifies the loan process.
Today, you can get your loan approved within minutes and the disbursal can happen within a few hours. But to fasten your loan approval, you must understand the personal loan approval process and adhere to the lender’s requirements.
Read on to know more about the personal loan approval process.
The Personal Loan Approval Process (offline)
The process to avail a personal loan is rather simple. You can get in touch with a loan agent at your preferred bank for assistance or talk to the bank manager directly. Here are a few steps that you should know about the offline loan approval process.
1. Completing the application
You can collect the physical loan application from the branch. Fill up the application form and furnish all the details correctly. Along with the loan application form you will need to submit a physical copy of the requested documents. Make sure you submit as many copies as requested and that all the details match with the information you provided on the application.
When a financial institution receives a customer’s loan application, it verifies all the information. Your age, employment situation and minimum monthly pay are a few factors that lenders consider. If the financial institution already has you as a customer, then this verification process might be expedited. But in most cases, it may take days to complete this process.
3. KYC Procedure
The banking institution checks your KYC (Know Your Customer) data and documentation after confirming your personal and employment information. Submitting KYC documents is vital to the loan approval process. These documents fall into the following categories:
- Identification documents: Driver’s licence, passport, PAN card, voter ID, and Aadhar card. Address proof: Utility bills, a passport, a voter ID card, and a ration card
- Employment or service documentation: Pay slips, identification at work, and bank statements are all acceptable forms of documentation.
- Financial records: Form 16s, pay sli[d, and other pertinent records from 2 and 12 months ago.
4. Address Verification
To verify your address, the lender’s representative may visit you at home. They may also visit your office to confirm your employment. This verification is conducted to reduce the risk of fraudulent borrowings.
5. Loan Approval
Once the financial institution is certain that you are a legit borrower with high eligibility, they will move towards approving your personal loan application. Once the verification is done, the approval does not take much time. You shall be notified through a message or Email on approval.
6. Loan disbursal
Once your loan application is approved and you agree to all the terms and conditions of the lender, your loan disbursal process will start. The lender would start the loan disbursal process. This includes calculating the loan processing fees, GST and other charges. The lender deducts these charges from the loan amount before disbursal.
Personal Loan Approval Process (online)
You can apply for an instant money loan online by going to the bank’s official website or by downloading the app. But first, you need to conduct indepth research regarding the lending institutes.
Next, select the personal loan offer that suits your requirement. Fix the preferred loan amount and tenure to an instant personal loan approval. If you are not sure which loan tenure to choose, you can use an EMI calculator.
Fill out the loan application and submit it digitally on the website or the app. You can upload copies of your documents together with the application form. This includes documents related to your identification, residence, and income to the bank. You must also provide copies of your Form 16, payslips, bank statements, and income tax return as evidence of your income.
You can provide copies of your PAN card, passport, driver’s licence, Aadhaar card, or voter identification as evidence of identity. You may provide copies of your passport, voter ID card, Aadhaar card, house registration certificate, sales deed, utility bills, or LIC payment receipt as proof of residency. You must also submit two passport-size photos.
After submitting your documents, and the loan is approved, the money is transferred into your bank account within 24-48 hours
Instant personal loans are becoming increasingly popular among young borrowers who want tech-savvy solutions to their problems. With a personal loan app, they can now avail quick financing at the tip of their fingers. The approval process is much faster and simpler.
Whether you opt for a personal loan app or go with traditional financing, the approval process for personal loans is easy for both. You just have to meet the eligibility requirements of the lender and submit the documents correctly.