Loan Application (Photo Credit: File photo)
New Delhi:
In times of financial urgency, personal loans serve as a go-to resource for countless people, offering them a viable source of instant funding. What’s more, this is without collateral and requires minimal documentation. Despite the ease of securing personal loans without much hassle, the reality often involves navigating certain factors that will speed up the approval process.
In this post, we will discuss how to get fast approvals for your personal loan application. This will help you expedite your loan approval, save time, and make the overall experience more convenient.
8 Ways to Get Quick Approval for Personal Loan Application
Try Applying Online
Applying for an Online personal loan is not just a convenience; it is the fastest and most secure way to avail yourself of immediate financial assistance. The process involves providing all required information, uploading necessary documents, and receiving a confirmation message from the lender. Once your profile and documents are verified, the lender will approve or reject the application.
A major advantage of online personal loan applications is that applicants receive timely notifications through emails and messages, keeping them informed about the progress of their loan application. The approval process usually takes around one week after submitting all required documents, with disbursement taking an additional 1-2 days post-approval.
Check with your existing bank for personal loan offers before exploring other options. Many banks now extend pre-approved and pre-qualified personal loans based on credit history and banking relationships. Using such online pre-approved offers can disburse the personal loan amount within a few minutes.
Maintain a Good Credit Score
Your credit score is a deciding factor in determining your creditworthiness. While a score above 700 is generally considered good, aiming for a score above 750 can provide an added advantage in speeding up the approval of a personal loan.
Lenders primarily evaluate your income and credit repayment history when considering a personal loan application. A good credit score indicates a lower risk profile, increasing the likelihood of quick approval. Beyond fast approval, a higher credit score can result in more favourable interest rates and lower processing fees. To enhance or maintain your credit score, ensure timely payment of EMIs and avoid defaulting on any loans or credit card dues.
Check Your Credit Score Before Applying
Even if you believe you have a spotless credit history, checking your credit score before applying for a personal loan is essential. Unintentional delays in loan repayments or potential errors in the credit score can affect your eligibility and lead to loan rejection.
Moreover, different lenders may have varying credit score requirements. Checking your credit score beforehand allows you to align it with the lender's eligibility for a personal loan, reducing the risk of rejection.
Keep a Good Bank Balance
Lenders assess your repayment capacity by evaluating whether you maintain a good Average Monthly Balance (AMB). It is calculated by adding the daily closing balance for all days in a month and dividing it by the number of days in a month, a higher AMB implies a robust repayment capacity.
Maintaining a substantial bank balance can be particularly advantageous when considering instant, pre-approved, or pre-qualified personal loans. These seamless and hassle-free loans are more readily available to individuals who consistently maintain a higher average balance in their savings accounts.
Before applying for a loan, consider these pointers:
1. Carefully read the terms and conditions.
2. Understand various fees and charges.
3. Compare offerings with other lenders.
Apply Only With One Lender
In urgent need of funds, individuals often apply for personal loans with multiple banks and NBFCs, hoping to increase their chances of securing a loan quickly. However, this approach may backfire, as lenders can observe multiple applications and interpret them as a sign of financial stress and desperation.
Submitting applications to various lenders can result in potential rejections and adversely impact your credit score. Coordinating with multiple lenders can be time-consuming, and managing several applications simultaneously requires meticulous tracking.
Each lender has unique personal loan eligibility criteria, and while personal loans may seem similar, differences in features, benefits, interest rates, and other charges can be substantial. Before applying directly, research and select a lender after analysing their eligibility criteria and product features.
Keep All Documents Ready
Efficiency in document management contributes significantly to speeding up the personal loan processing time. While personal loans, being unsecured, do not require an extensive set of documents, it is essential to be aware of the lender's requirements.
Common documents include:
Identity Proof: PAN Card, Aadhaar Card, Passport, etc.
Address Proof: Aadhaar Card, Voter ID, Passport, Electricity Bill, etc.
Income Proof: For Salaried Applicants: The last 3 to 6 months' salary slips.
For Self-employed Applicants: Latest Income Tax Return (ITR) along with Computation of Income, Last two years Balance Sheet, and Profit and Loss Statement certified by a Chartered Accountant (CA).
Provide Accurate Information
Accuracy in providing personal and income details is essential for increasing the chances of loan approval and ensuring a smooth and hassle-free process. If you have multiple sources of income, it is advisable to provide details for all sources simultaneously, minimising the need for additional income-related documents later.
For example - Providing the rental agreement along with permanent address proof is necessary for individuals staying on rent. Accuracy in information submission streamlines the entire loan approval process.
Leverage Preapproved Loan Offers:
Save time and streamline the borrowing process by exploring preapproved personal loan offers. Many financial institutions, like ICICI Bank, extend preapproved loan options to eligible customers based on their credit history and financial profile. Check your preapproved offers to expedite the loan approval and disbursement process, ensuring a quick and hassle-free experience.
Conclusion
While availing of a personal loan might not be as easy as it seems, adhering to the above tips can significantly increase the likelihood of quick approval. Recognising that personal loans are often sought in urgent situations, taking your time with the application process is important. Instead, conduct thorough research, apply with diligence, and choose a lender whose eligibility criteria and offerings align best with your requirements.
Furthermore, reading all terms and conditions, including processing fees, pre-payment charges, and foreclosure charges, in advance ensures that there are no unwelcome surprises later. Understanding and strategically navigating the personal loan application process can transform it from a potentially complicated endeavour into a straightforward and efficient financial solution.
