Digital platforms have made personal loans easier to obtain in India. With modern lending solutions, the approval process is instant, and there is no need to visit the lending institutions physically. One can use online personal loan apps to smooth the process. However, knowing each step associated with the personal loan application process is necessary. This article provides a detailed explanation of each step, eligibility requirements, and a list of some required documents for personal loan applications.
Understanding Personal Loans
A personal loan is a type of loan offered by lending platforms and financial companies. People usually take these loans to fulfil urgent financial needs like hospital bills, school fees, or travel needs. You can repay the loan over a few months or a few years, depending on the lender’s policy. The interest you pay on the loan depends on the lender’s policies and your personal profile. To decide if you are eligible, the lender checks your income and how well you have repaid past loans. Applying through online platforms has made this whole process quicker and easier for most people.
Steps to Apply for a Personal Loan Online
The following are some easy steps to apply for a personal loan online:
Step 1: Research and Compare Lenders
Comparing loan options helps reduce your total borrowing cost. Factors like interest rates, processing fees, and loan terms can differ among lenders. You need to research and gather information on lenders providing personal loans to get the right option. You should read through customer reviews to get an understanding of the lender’s service.
Step 2: Check Eligibility and Credit Score
When you apply for personal loan online, verify that you meet the lender’s eligibility criteria. This helps avoid application rejection. Your credit score has a strong impact on approval and interest rate. You can access one free credit report per year from authorised platforms. If necessary, look for ways to improve your credit score.
The following are some common eligibility criteria for personal loans:
- Loan applicants must be between the ages of 21 and 65 years old.
- Minimum monthly income for a salaried employee typically ranges from ₹25,000 to ₹30,000, depending on the lender.
- Self-employed applicants are expected to show a stable and sufficient income.
- A stable job or business for more than 12 months is often required.
Step 3: Gather Required Documents
Get your paperwork ready before you begin with the loan application form.
- Identity verification includes Aadhaar card, PAN card, or passport documentation.
- Address confirmation requires utility bills, rental agreements, or property documents.
- Income documentation varies between the salaried and self-employed applicant categories.
- Employed individuals typically require salary documentation and banking statements.
- Self-employed persons need income tax returns and business registration documentation.
- Moreover, recent passport-sized photographs are necessary for most applications.
Step 4: Understand Repayment
The personal loan EMI calculator can be a helpful tool to plan your monthly loan repayments. You can input the desired loan amount, interest rate, and tenure to calculate the EMI. The monthly EMI is reduced with a longer tenure, but the overall amount of interest paid rises. A shorter term may lead to an increased EMI but lower interest overall.
Step 5: Fill Online Application Form
Next, you need to finish filling out the application form on the lender’s website or app.
For this, you need to provide your personal, contact and employment information. The information needs to be accurate. You will also need to provide your current income details accurately. Make sure you avoid mistakes, as this might delay processing. Many lending platforms let you save your progress and return later to finish the form.
Step 6: Upload Documents and Submit
After completing the form, upload all the required documents through the lender’s secure portal. Make sure the files are clear and meet the specified format and size limits. Keep all documents organised for easy reference. Income and bank documents should reflect financial stability. Many portals send confirmation receipts after upload, and you may also be able to track the verification status online.
Step 7: Application Review and Verification
Following submission, the lender will examine your documents and application. This may include contacting your employer to confirm job status and reviewing your bank statements for income verification. Credit bureau reports are used to check your repayment history. In some cases, references may also be contacted. Lenders may send status updates or ask for clarifications. Timely responses can help ensure smooth and quick processing.
Step 8: Loan Approval and Disbursement
Once your application is approved, the lender will inform you via SMS or email. Carefully review the loan agreement, which includes the interest rate, tenure, EMI amount, and other terms. You may need to sign the agreement digitally. The approved loan amount is then transferred directly to your bank account. The entire process may take a few hours to a few days, depending on the lender.
Conclusion
Applying for a personal loan online has made the borrowing process simple and efficient. With digital platforms, you can apply at your convenience and upload documents securely. Using tools like the EMI calculator helps in financial planning and decision-making. By preparing documents in advance, you can increase your chances of approval. Comparing lenders, checking your credit score, and understanding loan terms are important to make the right borrowing decision.