Many millennials are increasingly turning to personal loans as a source of funding. It’s simple to get, needs practically no paperwork, and is safe to use (does not require any collateral to be put up). All of this has made it possible for people to satisfy their financial obligations with little difficulty, while also ensuring consistent cash flow during difficult times.
If you plan to take out a Personal Loan in India, especially to cover a financial emergency, you should learn as much as possible about the loan disbursement process. This will assist you in receiving the loan amount in time to deal with the situation.
You can finish all of the procedures on time and acquire the loan swiftly if you understand all of the processes. Here’s a simple guide to the process.
Loan application
The processing of your loan application is the first step in the personal loan disbursement process. After you’ve submitted the form, the lender will verify your credentials either within a few hours if you apply online or within a week if you apply offline.
You’ll be requested to submit a set of document proofs for verification in addition to the application form. To minimize any delays in the process, make sure all of your paperwork is properly attested and updated, as needed.
Your Personal Loan application is typically processed between 24 hours to a week, depending on the accuracy of the information you give. Banks usually issue a check that you may pick up at the branch or have mailed to your address once it has been approved.
You’ll go on to the following stage: loan approval, once the lender is pleased with the information you’ve provided.
Loan approval
The lender will begin the approval procedure after you have submitted your loan application along with all relevant papers. Approval may take 2-3 working days depending on the lender you choose. If your documents aren’t in order, the approval may take longer. As a result, before completing your loan application, double-check all of the required papers.
Loan disbursal
If your loan is approved, you will receive a sanction letter by email or regular mail. The sanction letter will state that your loan application was approved. It also has other information such as interest rate, loan amount, Equated Monthly Installment (EMI), and so on. There are personal loan EMI calculator tool to evaluate the EMI before applying for the loan.
The time it takes for a personal loan to be disbursed after it has been approved can be as little as 1-2 days. After that, you can go to the lender and pick up a check for the loan amount. Some lenders will also send you a check by mail. Most lenders have begun paying loan proceeds straight into the borrower’s bank account in recent years.
Confirmation from the bank
The bank will send a confirmation letter along with a welcome kit when the Personal Loan has been disbursed. It can be either through email or as a printed copy. The bank will also give you an EMI calendar and an amortization table. It is to assist you in calculating your loan installments’ principle to interest ratio.
Loan repayment
You can begin repaying the loan as soon as you receive the funds. Electronic Clearing Service (ECS) or post-dated checks are two options for paying EMIs.
You can give standing instructions for automatic EMI deduction on a fixed day every month if you already have an account with the bank from whom you took the loan. Non-payment or late payment of your monthly EMIs may result in fines.
