A personal loan is a loan that is borrowed by an individual from a bank for his/her personal use, which could be anything. Mostly all the banks provide personal loans
, just at different interest rates. An individual can apply to any bank for a personal loan and get one, depending on the needs. There is a long and standard process that all banks follow while providing a personal loan. Also, as a personal loan is not a secured loan, or we can say, banks provide this loan just on the basis of your documents, without keeping any collateral, it becomes a really important task for banks to verify the borrower's background thoroughly, hence they follow a strict verification process. Listed down are the 4 stages that are involved in personal loan verification.
1. It all starts with the loan application
The very first step of any personal loan is the loan application. It is very important that you apply for a loan when you are very clear about your requirements and whether you are eligible for the same as per the basic Bank standards. It is always recommended to do your research well before the application. Fill the application well and go for the right banks. Never forget to study the interest rates that the banks offer and decide accordingly for you. Once you submit the application, the bank provides you with an application number, which helps you to track the status of your application online, making life super easy.
2. Collect all the documents
Once the application is submitted, it's time for the lender to collect all possible documents from the borrower. Banks usually provide a list of all the required documents beforehand. Hence, it is suggested to keep the documents ready and handy to ensure delay in your verification process. Some of the basic documents that every bank asks for are listed below for your reference.
• Identity proof: Some banks ask for just one Identity proof, however, some ask for two. Hence, one should be ready for both cases. Also, the proof that you are showing must have your picture in it.
• Address proof: address proof should be of your permanent address which makes you credible as per the standards of the bank. They might ask for extended proofs for your address, keep it ready anyways.
• Employment proof: Banks always ask for proof of employment to ensure that the borrower is capable enough to pay back the loan he/she is borrowing.
• Bank statement: bank transactions are another income proof that has to be submitted for a loan, no matter which bank is it.
• Photographs: Always keep your passport-size pictures ready, as they are mandatory.
3. Verification and sanction
Once all the documents are provided by the borrower and received by the lender, the verification process begins. They not only verify the documents thoroughly, but at the same time, they might visit your address or office to complete their verification process. Once they find all your information and documents genuine, they check your financial background. On the basis of your income, CIBIL score, and payback capacity, they sanction you a loan of a particular amount and share with you the notification of the same.
4. Loan disbursal
Once the loan is sanctioned, the bank asks you to accept the offer officially and once you do that, you have your loan ready to get disbursed. The loan is only disbursed after a long process of documentation and thousands of signatures which time is taking but mandatory. And finally, you have the loan by yourself.
The above 4 steps are the basics of not just personal, but any loan that you apply for. It is suggested to read all the pros and cons and be ready for all circumstances before applying for the loan. Qualifying for personal loans is a concern for every individual that needs immediate access to funds. However, qualifying for home loans seems tough when you don’t have any idea about the personal loan verification process.
The above-mentioned 4-step verification process will surely make sense when you want to get your hands on funds immediately. So, keep the process in mind and make loan applications easy to approve.
To begin with, you should start applying for personal loans with the help of loan advisors. Reaching out to professionals makes sense when you are not sure how to qualify for personal loans. They will help you determine your needs and seize the best deals on personal loans. In fact, they will arrange a wide range of options available for you to choose from. You can compare the loan offers and qualify for the loans with the above-mentioned easy 4-step verification process. So, therefore, apply for personal loans and get your hands on immediate funds at your leisure.