Personal loans enjoy an ever-increasing demand among consumers. When faced with a financial emergency, a personal loan is a viable option. What differentiates this loan from other loans is that there’s no physical asset given as security. Thus, it acts like an unsecure loan availed from banks and Non-Banking Financial Companies (NFBC’s,) which in turn increases its interest rates compared to other type of loans.
These loan can be availed for many reasons like buying a car, financing your child’s education, going on a dream vacation, renovating your home or meeting unforeseen medical expenses. Also, you can enjoy tax benefit on personal loan under Section 24 of the Income Tax Act of 1961, if you apply for a personal loan to buy or renovate your home. Age, income, bandwidth of loan repayment and place of residence are the usual criteria involved in this loan application. Since a lot of times these loans are taken during an emergency, time taken by lenders to give approval time is an important factor for consumers. The approval and disbursal time is based on its online or offline application. Besides, the type of lender, existing relationship of the applicant with the bank and many other aspects are taken into consideration when availing a personal loan. Now, we will discuss these factors in detail.
With the advent of technology, many banks and NFBCs offer online application options for personal loans. With online applications, you will have to upload documents related to identification proof, address proof as well as income proof. Some financial institutions insist on physical submission of these documents to the lender. So quite obviously, the application with online documentation will take lesser time than physical submission of documents. The loan processing involves approval and later disbursal of the amount. In an offline application, approval takes three to four days. Once the loan is approved, money is deposited into your bank account in two to four days. The time taken for loan processing is reduced to three to four hours in case of online applications, provided document pre-requisites are met.
A bank has the basic Know Your Customer (KYC) details of an account holder. This reduces the loan processing time when you have an existing account with the lender, which is only in case of a bank. And with the online application, the loan sanctioned amount is credited into your account faster. This too may vary from three to seven days, depending on the bank you choose. And if the account is in a private sector bank, the personal loan is processed faster as these banks are keener on these loans, unlike the public sector banks. In case of banks, the money is credited directly into your account. But since this facility is not available in NFBCs, the loan processing will take longer. Finserv MARKETS strives to provide instant approval in less than 3 minutes and loan disbursal (provided everything is in place), within 24 hours of approval.
If you have an existing salary account in a bank and you enjoy pre-approved offers, approval of your loan could happen instantly. This is because the bank has pre-set the loan amount based on your already existing KYC details and the regular income deposited every month in your salary account.
Other factors that influence time to process a personal loan are:
- Some top listed companies, multi-national companies and public-sector undertakings are pre-approved beneficiaries of banks. So, if you are an employee of such companies, your loan will be approved faster.
- Past transaction history also affects the time to get a personal loan. If you possess a credit card with a good limit, have a good credit score and credit history, your Bajaj Finserv Personal Loan will be processed faster.
- Besides, the type of documents registered in KYC and your income also determine the time taken for loan processing.
Nowadays, there are third-party websites that compare personal loans offered by several lenders. So, do your research and select the appropriate lender as per your requirements.
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