How Long It Will Take To Process Personal Loan In India
A multipurpose loan like a Personal Loan is very useful when you have legitimate financial needs, such as paying for education, healthcare, a wedding, funding a vacation, consolidating debt, etc. In comparison to a home loan or any other type of loan, the application process for a personal loan is much simpler because there is no need for collateral and there is little paperwork to be submitted.
Personal loans are also called instant personal loans in India because they are instantly processed and received by the borrower. Whereas the period can vary depending from person to person. Keeping in mind the factors affecting the amount and duration of it getting approved. We have discussed further, the time it takes and the factors affecting personal loans in India.
What is a personal loan?
A personal loan, which is sometimes referred to as an instant loan or an instant personal loan, is a loan you can get from a financial platform or financial institution, such as a bank, at a set rate of interest to cover personal financial demands like a wedding, education, or any other emergency.
Because borrowers are not required to offer any security or collateral in exchange for the money borrowed, personal loans are frequently referred to as unsecured loans. The borrower consents to pay a fixed rate of interest over a set period through EMIs.
Steps involved in the application for a personal loan
Step 1: Establish what you need. Decide why you require a personal loan and how much you require.
Step 2 is to confirm loan eligibility.
Step 3: Determine the monthly payments.
Step 4: Go up to the bank.
Step 5. Submit your documents.
How long does it take to process a personal loan in India?
Lender factors may affect whether a personal loan is approved. It’s now incredibly simple to apply for a loan thanks to digitization and the passing of the years. You can learn your eligibility in a matter of minutes, and the entire application procedure can be finished in under an hour.
It may take 1 to 7 days after your application and supporting documents are received for your loan to be approved, and another few days for the funds to be disbursed. This period could change based on the type of lender you choose. Banks may take a few days to a few weeks to process your loan, whereas online direct lenders can do so much faster.
Factors affecting the time of the personal loan in India
Your request is evaluated based on the evidence of your income, age, credit score, and other factors; if your credit score is 700 or higher, you may be eligible for a loan sooner. When lenders request more details, the loan approval process occasionally takes longer.
Verification takes a lot of time as well. Due to the absence of any form of collateral, a thorough verification procedure is necessary to determine whether the applicant is credit-worthy or not. As part of the documentation, you must submit information about your income, bank accounts, employment history, and address. If any of these documents don’t meet the requirements for approval, your loan may be delayed.
Following are the few factors that affect the time and amount of personal loans in India:
- Base Credit score: Candidates with scores of 750 or above are thought to be more financially responsible and hence less likely to fail. As a result, banks and NBFCs favour providing personal loans to these individuals. For candidates for personal loans with better credit ratings, many lenders also charge reduced interest rates. However, some lenders also provide personal loans at higher interest rates to applicants with poorer credit ratings. As a result, candidates should regularly check their credit ratings and take the required actions to keep them as near 900 as feasible.
- Income: When you have a high income, it indicates that you are most likely to repay in the eyes of the bank/ financial institution. When it comes to salaried professionals the minimum salary requirement is between 15,000 to 25000 by lenders. When you are self-employed your annual income should be more than 2 lakh per annum to acquire a loan.
- Age: A personal loan is typically available to borrowers between the ages of 18 and 65 through most banks and NBFCs. According to retirees’ pension income, some public sector banks also provide personal loans to them.
- Employer Reputation: Creditors give personal loans to salaried applicants at cheaper interest rates because of their greater income stability as compared in comparison with self-employed candidates.
- The other factor that is commonly taken into consideration is the Repayment capacity of the borrower. Applicants for personal loans are often approved by banks and NBFCs if their EMI/NMI ratio is between 50% and 55%, however, this might vary among lenders
Final words
Taking on a personal loan can be very helpful in times of emergency. Though it is pretty easy and simple to apply for a personal loan in India, having all the information in hand before applying for help.
Make sure you visit Piramal Finance to know more and get help with personal loans, business loans, housing loans, and other financial products for you with a very simple process. Visit our website today for a simple and seamless instant personal loan process.
FAQs
- How does the personal loan procedure work?
All you need to apply for a personal loan in India is proof of identification, proof of address, and proof of income. You can select the duration based on your needs and the flexible payment terms.
- Is getting a personal loan a wise idea?
If you have a reliable source of income and a high credit score, applying for a personal loan in India is a fantastic choice because you will be given a loan with a reasonable interest rate.