The demand for personal loans has increased rapidly in the last few years. Personal loans are a better option for wedding expenses, medical expenses, home renovation, any major purchase or debt consolidation.
Approval process for personal loan
Since personal loan is an unsecured loan, you do not have to pledge anything in it. Its delivery process is also very easy and fast. The process of personal loan can be divided into three parts – application, approval and distribution.
Personal loan application
Customers can apply for a personal loan online or by going to the bank themselves. After filling the personal loan application form completely, the lender will evaluate your loan application in a few minutes or hours. The lender will check your personal and financial information. This includes home address, phone number, employment, income flow and credit history. Pre-approved applicants get a personal loan in a matter of seconds.
Approval of personal loan
If all the documents given by you are found correct, then the lender will give you a loan. After the loan is approved, the lender will send you a letter of approval, in which information about your personal loan such as loan amount, interest rate, loan duration and its terms and conditions will be written.
Distribution of personal loan
After the loan is approved, the lender will send the loan amount to your account within 24 hours. The lender will send you check or demand draft through courier or you can take it by going to the bank. In some cases, the loan amount is sent to your bank account through NEFT. The loan amount you get is less than your request. The disbursement of loan amount will be based on these factors:
– lone type
– service tax
– Processing fees
– Upfront payment
Confirmation from lender
After the loan amount is disbursed, the lender sends you a confirmation email or hard copy with a welcome kit to your address. This kit contains information about personal loan in addition to EMI calendar, loan summary and repayment schedule. You can find the monthly payment on the principal amount and interest along with the repayment schedule from the table with information about repaying the loan.
If you have already taken a loan from the lender, then you are in the list of pre-approved customers. Lenders offer instant personal loan offers to such customers, in which no documents, submission or verification is required.
Loan repayment process
After the loan amount enters your account, you repay the loan according to the set terms and conditions. You can also repay the loan through post-dated check (PDC), electronic clearing services (ECS) and NACH (National Automated Clearing House).
If you have taken a loan from the same bank in which you have an account, then you can also instruct the bank that the EMI of the loan should be cut on this date. But if you have taken a loan from another bank, then the bank will accept payment through other payment methods as well. If you repay personal loan regularly then your credit score will be better.