Knowing as much as possible about the instant Personal Loan and its approval, disbursement, and repayment procedure is imperative if you intend to apply for one. To learn more about this process, continue reading this post.
If you aspire to take out a personal loan using an instant loan app, especially to cover an urgent financial need, you should completely understand the loan disbursal process. By doing this, you will get the loan amount on time on the first attempt to deal with the emergency situation.
What, then, is the pay-out procedure for personal loans? How quickly will the lender disburse your loan? First, let’s go through the complete application and disbursal process to comprehend personal loans better.
Submitting a Personal Loan Application
The loan application is the initial stage of the loan disbursal procedure. You should fill out and submit the application for the Personal Loan using a quick loan app. In addition, you will need to submit the following documents:
- Proof of Identity
- Proof of Address
- Proof of Income
- Bank statements
- Income Tax Returns (ITR)
Step 1: Loan Approval
The lender will begin the approval procedure once you’ve submitted the loan application and the necessary supporting documents. The duration of the approval process can vary depending on the lender you choose. The approval process may take longer if your documents are not in order. So, before completing your loan application, review the documentation needed for the loan carefully.
If you have been a lender’s customer in the past, loan approval will typically happen more quickly. Consider applying with a lending institution where you have your savings or salary account.
Step 2: Loan Disbursal
When your loan application gets verified, the lender will send you a loan offer letter through email. Your loan application’s approval will be noted in the letter along with other information, such as the interest rate, loan amount, Equated Monthly Instalment (EMI), etc.
Personal loans can be disbursed instantly after approval. In case of offline applications, you can visit the lender’s office to pick up the loan cheque. In the case of online applications or instant loan apps, the lenders deposit the loan money directly into the borrower’s bank account.
Step 3: Loan Confirmation
After the loan has been disbursed, the lender will send you a confirmation letter. This could be delivered via postal mail or email. Typically, the confirmation letter is included with the welcome package.
The welcome kit will include detailed information regarding your loan, EMI, amortization schedule, EMI payment methods, due date, customer assistance, and more.
Step 4: Loan Repayment
You can begin repaying the loan as per the loan terms once you receive the funds. Electronic Clearing Service (ECS) or post-dated cheques are two ways to pay EMIs.
If you already have an active account with the lending institution where the loan was obtained, you can also set up standing instructions for the automatic debit of your monthly installments on a specific day each month. Pay your monthly EMIs on time to avoid penalties for missing or late payments.
Being a wise borrower
One should attempt to learn as much as possible about the loan process to borrow wisely. The complete loan application process will be more pleasant and simple if you know the fundamentals, such as the personal loan approval and disbursement process.
To prevent future missteps, carefully review the loan documentation, paying particular attention to the interest rate, penalties, and payback terms.
Important Lessons Learned
- Your monthly income, credit score, and loan payback period all play a role in determining the interest rate that will apply to your loan.
- You can switch your loan from one lender to another anytime. However, you may incur a small fee for the same.
Digital lending allows customers to apply for Personal Loans online through loan apps instantly. Data is reviewed using analytics and AI once applications for personal loans are submitted. The borrower’s history of on-time payments is considered when determining whether the applicant can repay the loan. The loan amount is disbursed to the borrower’s account within hours of approval.
Final thoughts
The loan process is simple with quick loan apps. However, fulfilling the eligibility criteria of each step is significant. Even though the procedure doesn’t take long, choosing the app (InstaLoan) of a reputed lender like Fullerton India can ensure a speedier disbursement. To begin with, all you must do is submit your application using the instant loan app.
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