Do you need some extra funds to fulfill your dreams and aspirations? A personal loan can be your financial savior during such times. However, before you dive into the world of personal loans, it’s crucial to understand the verification process involved.
What is a personal loan?
A personal loan is an unsecured loan offered to individuals by financial institutions, such as banks and non-banking financial companies (NBFCs). Unlike secured loans, personal loans do not require any collateral, thus making them a popular choice for various financial needs, such as home renovations, weddings, medical emergencies, or debt consolidation.
The personal loan verification process usually involves the following stages:
Loan eligibility
Before you proceed with the loan application, you must check your eligibility for a personal loan. Different lenders have specific eligibility criteria based on age, income, employment type, credit score, and existing financial obligations.
Most lenders provide a personal loan EMI calculator that allows you to determine your loan eligibility without impacting your credit score.
Loan application
The first step in obtaining a personal loan is to apply for one. Numerous banks and financial institutions offer the option of applying for a personal loan through their websites or mobile apps.
You can also visit the nearest branch to apply in person. During the application process, you must provide personal information, such as your name, address, contact details, employment status, and income details.
Submit all the documents.
After completing the application form, you will need to provide the necessary documents to support the information provided in the application. Commonly required documents include:
Identity proof: Aadhar card, passport, voter ID, or driving license.
Address proof: Utility bills, rental agreement, or bank statement.
Income proof: Salary slips, bank statements, or income tax returns.
Employment proof: Offer letter, employment certificate, or business ownership documents.
Ensure that you provide accurate and up-to-date records to avoid delays in the verification process.
Verification of the documents
After you have submitted the required documents, the lender will initiate the verification process. This involves cross-checking the information provided and assessing your creditworthiness. The lender will verify your identity, address, income, and employment details. Your credit score and history will be reviewed to determine your ability to repay and your risk level.
Loan amount disbursal
Once your loan application is verified and approved, the lender will transfer the loan amount directly into your bank account. The loan amount disbursal process may vary depending on the lender. Still, it typically happens within a few working days after the loan approval.
Some lenders offer instant disbursal facilities for pre-approved customers, which allows you to get the funds quickly and conveniently.
To wrap up
Acquiring a personal loan can be straightforward if you are well-prepared and aware of the steps involved in the verification process.
Remember to choose a lender with favorable interest rates, flexible repayment options, and transparent terms. Before applying for a personal loan, assess your repayment capacity to ensure you can comfortably manage the Equated Monthly Installments (EMIs).
