Getting a personal loan used to be a tedious process with the need of physical submission of documents and loan application at a bank branch. In the last few years, the advent of digital lending platforms and instant loan apps has made it quite convenient to avail a personal loan. These days you can even get a personal loan within a few minutes to a few hours, depending on the lender and your eligibility.
The personal loan approval processes vary across banks and non-banking financial companies. For example, if you have a pre-approved loan from your bank, the money will be credited in minutes or within a few hours. However, traditional personal loans, which are usually of larger amounts, may take a longer time to get approved.
The Moneycontrol app and website gives you access to instant personal loans of up to Rs 15 lakhs within minutes. The interest rates start as low as 12% and you just have to fill in your details, complete KYC and set up repayment to get your credit approved.
In this article, we will discuss how much time it will need for your personal loan to get disbursed and the factors that determine the personal loan approval time.
What is a personal loan?
A personal loan is a sum of money borrowed from a bank or an NBFC, which can be used for an array of purposes. For example, you can use it to consolidate debts, renovate your home, fund your wedding expenses, cover unexpected medical bills, pay for your dream vacation and more. In India, personal loans are offered by banks, credit unions, and other financial institutions.
How much time will it take to get your personal loan approved?
Personal loan approval time varies from bank to bank and lender to lender. The personal loan approval process begins only after you submit the loan application with required documents. The bank then runs background checks and determines whether you are eligible for a personal loan in India or not.
As discussed above, if you have a pre-approved loan with your bank, your personal loan approval time will get reduced a lot. You can get the loan disbursed within seconds since you already have an established relationship with the bank and instant loans are 100% digital in most banks to streamline the approval process.
However, if you are applying for a higher loan amount or are going to take the loan from a different financial institution, the personal loan approval time may take longer. Usually, banks disburse your personal loan between 3-7 days, depending on the processes and your documents.
The personal loan approval process involves multiple steps. After you submit your documents to the bank, it will assess your application and examine your credit score, employment history, income stability among other things to determine your creditworthiness. The bank may run some other background check to make sure you do not default on the repayment of your loan.
Factors that determine personal loan approval time
As mentioned above, the bank runs several background checks to determine whether or not to approve your loan. This usually takes some days to run the processes. However, if you have the following things in place, your personal loan approval time will be reduced.
- Documents submitted: If you submit all the required documents correctly, the bank can start the approval process in no time. However, if some document is missing or if you have submitted the wrong documents, the personal loan approval process may take more time.
- Credit history: If you have a good credit history, that is, if you have taken a significant number of credits and loans and have repaid them on time, your loan approval process will not take too long.
- Credit score: Banks rely highly on your credit score to determine if you are eligible for a loan as it reflects your creditworthiness as a borrower. If you have a credit score of more than 750, chances are that your personal loan will get approved faster.
- Income stability: The number of years you have worked at your job or previously shows if your income is stable or not. Banks generally extend credit faster to those who have a stable income. Your income represents your loan repayment capacity. People with higher income have higher chances of getting their loans approved faster.ALSO READ: Instant loan without documents: Myth or reality?
Besides these factors mentioned above, your existing relationship with your bank has importance too. If you have consistently maintained a good relationship with your bank, personal loan approval time is significantly reduced.
Through the Moneycontrol app or website, you can apply for a loan of up to Rs 15 lakhs, with interest rates starting as low as 12% per annum. The loan application process is completely paperless and can be completed online, with instant approvals.
Disclaimer
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