Opting for a personal loan? Follow the checklist to get loan approval instantly
New Delhi : The financial status of every individual varies to a great extent. The expenses are constant while the inflow of cash is a major concern for everyone. Many people are able to meet the expenses but even in that situation, one cannot refrain from financial emergencies that are natural to happen from time to time. This is when the thought of opting for a personal loan sweeps in. A personal loan is an unsecured loan that is offered by all banks and NBFCs for verified purposes. Choosing a personal loan over others is a feasible solution since one does not need any type of collateral, making the process of approval both easier and faster.
Understanding Personal Loan and Factors Affecting it
There are two types of loan - secured and unsecured. While a secure loan demands collateral or security, an unsecured loan does not require the same. So, the most simple explanation of a personal loan is it is an unsecured loan offered by several banks and NBFCs. A personal loan can be considered for almost any requirement that is marriage, education, home renovation, travelling, buying assets such as gold, medical requirements, etc. One can even consider a loan for buying a vehicle and property. Needless to mention, the approval of a car loan or education takes longer to process and it is credited directly to the company or the institute respectively. But in case of a personal loan, it is credited to the borrower’s bank account.
The personal loan market has seen substantial growth in India despite the intrusion caused by the COVID-19. According to the reports, the Indian Personal Market is expecting further growth of 10% during the forecast period. The rising demand for a personal loan on the consumer/borrower level is due to the following reasons-
● The key factor that drives the personal loan market in India is the increasing gap in income and expenditure alongside rising aspirations among the young population.
● The size of personal loans is smaller as well as easy to access, which is helping boost the market.
● Another major factor is the digitalisation which has lowered the cost, increased efficiency and continues to influence the market.
● Despite the fact that banks are expected to dominate the growth of the personal loan market in India, the scenario is otherwise. There are non-banking financial companies which witnessed considerable growth for their efficient and promising service.
Step-by-step Checklist to get Loan Approval Instantly
A personal loan is a type of instalment credit where you get to borrow a sum of money and pay it over time on a monthly basis. To apply for a personal loan, choosing the right lender is the most important decision. Here is a personal loan checklist to help you get started applying for a personal loan.
Things to Consider Before Application
The purpose: The purpose of applying for a loan is important since it will help you shortlist the bank or NBFC that offer the best privileges.
Amount: You should never go for a higher amount than actually needed since you will be on the hook to repay the entire amount even if you do not use it.
Credit score: Your credit score decides your privilege to choose the best lenders among others. If the credit score is good, you can apply with better lenders having lower interest rates. In case your credit score is low, you can improve by paying off your credit balances or any past due amounts as well as paying the future bills on time.
Check your credit report: Having a look at your credit report is important to see if there is any negative remark that would hamper your loan sanction.
Document Requirement Checklist
Identity proof: You will be required to present an identity proof like Voter’s ID, Driving license, Aadhaar card, etc.
Residential address proof: As a residential address proof, you can use a Ration card, utility bill, passport, etc.
Income proof: If you are a salaried person, you can provide 3 months payslip and bank statement.
Application form: You will be required to fill the personal loan application form. On the other hand, some of the lenders offer online applications which save both time and effort.
Photocopy: Passport size photocopies are required to complete the documents.
Type of lenders
Basically, there are two types of lenders of personal loan, private bank and NBFC. For private banks, one will need to provide hard copies of all the documents. The process involves an application for the loan, submission of the documents, verification of the document by the lender and finally approval. Thus, it may take at least 48 hours or at most, a week to get the loan sanctioned.
On the other hand, you can opt for a personal loan from NBFC, the processing of which is faster. Since most of the NBFCs offer a completely online process of application and approval, the time taken to complete the process is much less compared to banks. Hence, for an instant loan, you can consider NBFC over a private bank. The process involves visiting the app or website of the particular NBFC, registering your mobile number and verifying the same, filling up the form and providing necessary documents and finally submitting the request. The sanctioning may take a few hours only.
Given the basic details, NBFCs have proved themselves to be the game-changer. It is through them that the demand for personal loans has seen a surge. Based on the credit bureaus data from the financial year 2016 to 2019-
It is crucial to decide on the right lender in order to avoid trouble in the future. In addition to that, if you are already an existing customer of a particular bank or NBFC, you can look for additional benefits they provide. While you can trust the banks and NBFCs for a personal loan, going through the terms and conditions are a prerequisite in order to avoid misunderstanding in the future.