Today, most banks and other financial institutes are focusing on online means for doing away with complicated documentation processes and accelerating the entire Loan approval process. Also, the demand for such Loans is high nowadays. Generally, the Personal Loan approval process has some steps involved:
Application Form
All Loan applicants need to fill out the application form thoroughly to start the approval process. The form may have many sections wherein you must input details and information about your financial standing. Ensure you fill out the form and cross-check details before submitting them to the bank. They are the first information that the bank reviews upon receiving the Loan request.
Along with the form, you also require a set of documents to apply for Loan. Get a list of all the documents needed and keep them handy before approaching the bank. Proper documentation facilities a smooth and quick approval.
Document Verification
Once the bank receives the application form and all necessary documents, they verify it. First, they confirm your details by going through the Know Your Customer (KYC) process. Then, they check the finances, and for this, they go through your bank statements, salary slips, and income tax return fillings. This enables them to understand your repayment capacity. At this stage, the bank scans your CIBIL ratings and credit history to predict your credit behaviour.
Your CIBIL score allows the bank to establish your creditworthiness as a borrower. An applicant with a higher CIBIL score stands a better chance for loan approval and lower interest rates.
Loan Approval
After the bank concludes with Personal Loan eligibility, they either ask for more documents or instantly approve the Loan. The amount, interest rates, and repayment term you apply for entirely depends on your eligibility. If your Loan request gets rejected, try speaking to the bank authorities and find the reason behind the request being denied so that you can improve and present a better case for your next application.
Loan Disbursal
If you apply for a Loan that is pre-approved, expect funds to get credited to your account within minutes. Some applicants hope funds get credited to Bank Accounts within days of approval. However, approvals and disbursals are subjective. They largely depend on your eligibility, documentation, and verification.
Hence, before applying, consider the time spent in documentation, verification, and approval time frame. This ensures that you are not left high and dry when in need of funds, and it provides the time to prepare a solid application. Now, apply online or visit the nearest bank branch.