Personal Loans are among the best financial instruments that one can choose to borrow funds from financial institutions. The quick loan processing and disbursement period make it a preferable choice during emergencies. Also, no restrictions are imposed on how the borrowed money is to be used. Borrowers are free to spend the amount as per their choice and needs without having to answer the lender. However, the EMI repayments have to be on time. Learning about the Personal Loan approval process is crucial to planning your finances. Read on to learn more about the Personal Loan disbursement process.
Understanding the Personal Loan process
The Personal Loan process refers to the exact procedure followed to provide the loan amount to borrowers. It includes each step, from the application stage to the disbursement process. Different lenders might have varied loan disbursement processes. Most reputed lenders follow a simple approach to offering this loan. The process has been simplified to help borrowers avail of loans easily without any delays. Here is a step-by-step guide to understanding the Personal Loan process.
- Stage 1: Applying for a Personal Loan
The first step in the process of getting a Personal Loan starts with making the Personal Loan application. Reputed lending institutions like Fullerton India have made it more convenient for prospective loan applicants to submit their applications online. In this stage, the applicant must provide essential details, including name, address, income, etc. Applicants also have to submit the required documents stated on the website. Most document requirements are standard for all borrowers; however, some might vary based on the profile. For example, a self-employed person might have to submit their ITR for income proof, whereas salaried individuals must submit their salary slips.
- Stage 2: Authentication of documents and information provided
After the applicants have submitted their loan applications and documents, the verification and authentication process will start. During this stage, the lending institution/party will verify the information provided in the form by cross-checking it with the official sources. The authenticity of documents submitted is also checked. It is done to reduce the risk for lending institutions. Fraudulent applications are rejected, and those that match the eligibility criteria are approved.
- Stage 3: Loan approval
Once the lender verifies the documents, the approval process will start. A representation of the lending institutions will reach out to the applicant to notify them regarding the approval of their application. In some cases, the borrowers might have to submit the missing documents/information as per the lender’s request before approval. This process can take between 1 to 3 days, depending on the borrower’s profile and lender’s policies. Institutions like Fullerton India also offer instant personal loans that are approved within a day. However, the applicant must fit the eligibility criteria and provide all required documents without fail. Also, the approval process is much faster if the applicant is an existing customer.
- Stage 4: Loan disbursal
Once the loan is approved, the disbursal process will commence. Most lenders usually send the applicants a loan sanction letter by post and email (if provided). It includes information regarding the acceptance of the loan application. All necessary details regarding the loan, including the loan amount offered, interest rate, duration, EMIs, etc., are mentioned in this document. It is highly recommended to use a Personal Loan interest rate calculator before making the application to know about the EMIs in advance. The disbursement of the loan amount can take 1 to 2 days after its approval. The exact timeline can vary based on the lender’s policy.
Post disbursement process
So, what happens next once the loan is disbursed to the borrower? Well, it is followed by a confirmation letter sent by the lender to the borrower. The lender can send it through email or post. A welcome kit for the customer accompanies the loan confirmation letter. This kit has all essential information regarding the loan, including the terms and conditions agreed upon by both parties. Now, the borrower assumes the responsibility to repay the loan amount as per the agreed terms and conditions. Not paying the EMIs timely can add to their financial burden and even lead to legal actions. Therefore, making the repayments timely and avoiding any delays is highly recommended.
Instant Personal Loans have proved to be a game-changer for the Indian economy. The demand for these loans is increasing by the day. People are finding it more convenient to finance various purchases and repay the loan amount through affordable EMIs.