Personal loans are one of the popular and sought-after loans in India. Whether it’s a vacation or a dream wedding, house renovation, higher studies or any emergency financial requirements, personal loans are an all-in-one financing solution. They provide you with financial leverage that extends well beyond your monthly earnings.
Banks and non-banking financial corporations (NBFCs) provide personal loans to meet your financial obligations. With easy verification and minimum documentation, you can borrow up to Rs. 40 lakh in as few as 24 hours.
Here’s the 5-step approval and disbursement process of personal loans that banks and NBFCs generally follow:
Loan enquiry
Get in touch with a lender and get to know about the personal loans offered by them. Approach various lenders and compare the terms and features of the loan. You should also check your eligibility criteria and calculate loan EMIs based on the principal amount and the interest charged by the lender.
Loan application
After clarifying the loan terms you need to choose a lender and apply for a personal loan. After receiving your application, the lender will process it to initiate the document collection and approve the loan disbursement. You can apply for a personal loan online, or you can personally visit the lender with your loan application.
Document collection
Once the lender receives the loan application, they usually send a representative or an agent to collect the required documents for a personal loan. Generally, the documents required are:
- Photo identity proof
- Proof of address
- Employment proof
- Income proof
- Photographs
Additional Read: How to get a low interest personal loan
Verification of documents
After receiving the documents, the lender initiates the process of verification. A representative from the field investigation team visits the borrower’s residence of residence to verify the address mentioned in the documents. They can also visit the applicant’s workplace to confirm if they works there. Verification of other documents like PAN card, Aadhaar card or passport is done using online portals.
After verifying the documents, the investigation team forwards its reports to the loan officer handling personal loan accounts. If the verification process is successful, the lender then processes the loan for disbursement.
Additional Read : Getting an aadhaar card: a step-by-step guide
Loan disbursal
Once all the documents are verified, the lender approves the personal loan application and prepares for its disbursal. The applicant needs to sign a loan agreement that contains all the information about the loan. Once the applicant signs the agreement, the loan amount gets credited within 24 hours to the applicant’s bank account.
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