With digitalization transforming every business activity, banks too have quickened the loan approval process in order to attain a strong foothold in the ever growing retail industry. In a very short period, most of the major banks have cut down their turnaround time from a few weeks to as less as one day. Turnaround time may be defined as the time taken by banks to process a loan request. With banks like HDFC launching the 10-second loan approval scheme, retail lending in the country has witnessed a major push. Today, most of the banks are focusing on online methods to do away with the complex documentation procedures and to accelerate the entire loan approval process. Also, the demand for such loans is higher these days. Typically, a loan approval involves the following steps:
Ideally, banks should acknowledge the receipt of a loan application within 7 days from the date of request. After the basic examination of the details furnished by the applicant, banks should intimate the person and issue him a registration number. Further documents to be submitted for loan approval should also be mentioned in the intimation letter. In cases where initial application fails to meet the eligibility criteria, the lender organization must return the application and communicate the reason for rejection. Banks also check your CIBIL report for written-off loans, payment history details, and EMI-income ratio to determine your eligibility.
The time taken for approval of a personal loan depends on the authenticity of the information provided by you. On approval, borrowers may either be offered a fixed rate of interest on the loans or a floating rate. Floating rates change according to the fluctuations in market. For the bank to approve loan request, you will have to submit the following documents:
It is advisable that you maintain a decent credit history to smoothen the entire process of loan approval. Paying dues at the right intervals and reviewing your credit status from time to time will help you in improving your scores. Before applying for loan, you can also check your eligibility through the loans webpage of the respective bank. You just have to fill out some basic information to know whether you are eligible for a particular loan or not.