According to a recent report, India’s personal loan market accounts for nearly 8% of the total banking sector’s portfolio. Additionally, a recent report from RBI mentioned that this particular financial product, including the unsecured credit segment, currently stands at Rs.7 lakh crore.
This growth and popularity of personal loan is primarily due to the range of benefits it has to offer, and one of the most prominent advantages of this financial product is its quick verification process. Almost every financial institution has introduced necessary steps to streamline the personal loan verification process, to make the loan application and disbursal process swift.
4 steps of personal loan verification
- Applying for the loan
The personal loan verification process begins with the submission of a loan application. Once the lender receives an application, it is processed to document collection followed by verification and approval.
- Documents collection
Once a loan application is approved and processed, the lender will contact applicants regarding document collection and ask for the following–
- KYC documents.
- Employment proof.
- Income proof.
Apart from these, a lender may ask for some additional documents as well. In that case, one needs to submit them accordingly.
- Verification of documents
The validation process begins after an applicant submits the necessary documents. The lender checks the eligibility criteria and submitted documents to make a final decision regarding whether to approve or reject that application.
- Disbursal of loan
When the verification process is over, and the application is approved, borrowers get a notification regarding the status of their application. It is further intimated via loan agreement and a personal loan sanction letter.
Personal loan verification process is straightforward, and hassle-free when compared to other types of credits. It is mainly due to the integration of the online application facility.
A step-by-step guide of online personal loan application
Here is a quick look into the steps necessary to apply for an instant personal loan online –
- Visit the official website of the lender.
- Duly fill out the online application form, with all the required details.
- Select the loan amount and repayment tenure. Applicants can use a personal loan EMI calculator to calculate the applicable monthly instalment before applying as well.
- Once everything is in order, borrowers will receive their loan amount within 24-48 hours.
To successfully complete this application process, one needs to meet the minimum personal loan eligibility and provide the required documents to attest to the same.
Eligibility criteria of a personal loan
- Age: 23-55 years.
- Credit score: 750 or higher.
- Employment type: Employee of an MNC, public or private limited company
- Monthly income: Depends on the requirements of a lender.
Since personal loans do not require a stringent eligibility criteria, it is not a hassle to avail this type of credit. However, if any borrower is struggling to fulfil these requirements, they can take necessary measures to improve their creditworthiness. Here are some easy ways to do that –
Keep the debt-to-income ratio in check: Along with credit score, applicants must keep their DTI ratio within 30% to present a better repayment capability and improve the chances for loan approval.
Improve the credit score: Improving the personal credit score is not difficult; one can comfortably do that by repaying his/her existing debts and solving any discrepancies in their credit report.
NBFCs like Bajaj Finserv further streamlines the loan application and verification process with the help of their pre-approved offers. This offer is applicable to financial products like personal loans, business loans, etc. Applicants can check their pre-approved offers by submitting their essential contact details.
The personal loan verification process has become time-saving after the introduction of online application processes. However, borrowers must thoroughly read the fine print before signing a personal loan agreement.