A personal loan is a type of unsecured loan which does not require any collateral or security unlike a home loan or car loan, the lender in case of default, can’t auction anything you own. It is taken by individuals from Banks and NBFC to meet their personal needs. However defaulting in your personal is not good as it would reflect in your credit report and can cause you problems when you are in requirement of any financial product.
Unlike home loan or car loan, the personal loan comes with flexible end use. The application process of the personal loan is way much simpler as compared to any other loan as the banks do not need to verify the details of any collateral or security. The only details the bank requires is to verify your eligibility and credit worthiness to sanction the loan. Also the online application and minimum documentation has made it more approachable and simpler.
What are the easy steps to get the loan online?
There are few steps one should follow to get a personal loan online.
The first and foremost thing you must do to avail the Personal Loan is filling the application form that includes your personal as well as professional details. However, it makes the process simpler and will also save a lot more time as you do not need to visit the branch yourself and go through the cumbersome process of meeting the formalities in a bank branch.
When the bank receives your application form, it starts verifying your personal details as well as your professional details and checks if you are meeting the basic eligibility criteria like minimum salary, age, profession, etc. If you are an existing customer of the bank then your financial details like bank statements, previous loans (if any), etc. gets verified immediately. Hence, saving more time.
After verifying your basic details the bank will start verifying your Know your Customer (KYC) documents which you might have uploaded online whilst submitting your personal loan application form.
The bank’s executive may make a visit to your residential as well as your official address to confirm the address mentioned in your application form.
Credit Score Check
After checking your address , the bank will check your credit worthiness by verifying your past tradelines if you have any, your repayment history and how you have been paying your EMI for the previous loans or credit cards, etc.
If you meet the eligibility criteria, your documents are verified and your credit score is meeting the bank’s criteria then the personal loan will be sanctioned to you immediately without any further delay.
Loan Amount, Tenure and Interest Rate
The loan amount and interest rate that the bank will offer will be based on your age, credit score, employer, number of years left in service, etc. the bank also offers you to choose the repayment period (within the range provided by the bank) on your own as per the repayment ability.
Once everything is decided, your loan amount, tenure and interest rate , you will have to pay processing fees to the bank to process your loan application for disbursal. These processing fees will be deducted from the loan amount sanctioned and the remaining amount will be credited to your account.
A personal loan enables you to fulfil your financial needs. It can solve many purposes like paying medical bills, marriage. renovating your house, going on a vacation, purchasing electronic gadgets or home appliances, etc. But it is most important to borrow the amount as per your repayment capacity. It is advised that you should always compare the offers of best personal loans provided by the banks before settling for one. Also you always need to keep one thing in mind that the documents you submit should be authentic and you should fill all the information correctly for smooth processing, approval and disbursal.