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Personal Loan Verification: A step-by-step guide on document verification for quick approval
09 February, 2025 | 11:01 IST
Personal loans are a go-to option for people who need some extra cash for consolidating debt, wedding expenses, home renovation, or covering unexpected big-ticket purchases. With instant loan apps, it has become convenient to apply for personal loans these days. Personal loans could be a suitable choice in case of a cash crunch as you don’t need to mortgage any asset to borrow the amount.
With affordable interest rates and flexible repayment terms, personal loans are pretty straightforward to manage. Of course, like any loan, it's key to make sure you're comfortable with the monthly payments before jumping in.
However, personal loans have a strict verification process. Lenders want to make sure you are financially stable before they approve the loan. Most lenders take into account the income level and credit score of the borrower before approving a personal loan application.
Let’s take a look at all the key aspects of the personal loan verification process.
Since personal loans are unsecured, you may have to go through a detailed verification process. Here's a simple breakdown of how the process works:
Loan Application: The process begins when the borrower submits a loan application, either online or by visiting the lender’s branch office. This initiates a review of your details.
Offer generation: Based on your personal and professional details, the lender checks your eligibility and provides you with an in-principal loan offer along with details such as loan amount, interest rate and tenure.
Offer selection and KYC: Once you choose a suitable offer, the lender initiates a hard enquiry on your credit profile to generate a final offer. Check the details of the loan offer including loan amount, tenure and interest rate. On proceeding you need to complete your KYC with the lender. During the KYC you may be asked to present documents such as proof of identity, address and income. In case of an online personal loan, the entire document submission and verification takes place digitally. In some cases, the lender may initiate a physical document verification.
EMI repayment: On proceeding, you need to setup your EMI repayment method. This involves setting up an auto-debit from your bank account using Enach or Netbanking.
Disbursal: On successful completion, you can proceed with withdrawal of your loan amount to your bank account. The lender also shares a detailed loan agreement on your email ID.
Address Proof: Documents like Aadhaar card, PAN card, Passport, Voter ID, or Driving Licence can be submitted as address proof.
Income proof: Last 3-6 months' salary slips, IT Returns and bank statements can be submitted. The self-employed individuals and business owners can submit their balance sheets, business ownership certificates, partnership deeds, bank statements and IT Returns.
Identity Proof: You can submit any one of Passport, PAN Card, Voter’s ID, Aadhaar Card or Driving License
Credit Score: It helps determine your creditworthiness.
Credit History: Lenders want to ensure you have a clean repayment record.
Income Details: Ensures you meet the lender’s minimum income criteria.
Employment Status: Verifies if you have a stable income source.
KYC Details: Basic identity and address information.
It’s important to note that several factors like poor credit score, insufficient income, unstable employment and discrepancies in the information provided may lead to rejection of loan application.
Check Eligibility: Minimum age, income, employment type, and credit score requirements vary by lender. A stable income and a good credit score improve approval chances.
Compare Lenders: Check interest rates, loan tenure, processing fees, and repayment options. Online aggregators help compare multiple lenders at once.
Apply Online or Offline: Fill out the application form on the lender’s website or visit a branch. Receive an application ID to track status.
Submit DocumentsIdentity Proof: Aadhaar, PAN, PassportAddress Proof: Utility bills, AadhaarIncome Proof: Salary slips, ITR, Form 16, Bank StatementEmployment Proof: Offer letter, ID cardSelf-employed: Business registration, financial statements
Verification Process: The lender checks documents and may conduct physical verification at home or office. Online verification is done for PAN, Aadhaar, and employment details.
Loan Approval and Disbursal: If verified, loan terms (EMI, interest, tenure) are finalised. The loan amount can be disbursed within few hours of approval.
You can apply for personal loans up to Rs 50 Lakhs through the Moneycontrol app and website. The interest rates start at as low as 10.5% per annum. Moneycontrol allows applying for personal loans from eight lenders in a completely digital process.
Switching jobs may impact your personal loan eligibility
Changing jobs can affect your personal loan approval. Lenders consider job stability, income consistency, and employer reputation when assessing loan applications.
Key factors to take into account:
Employment Stability: Frequent job changes can lower credibility.
Income Proof: A steady income history is crucial for loan approval.
Probation Period: Some lenders may reject applications from employees still on probation.
Employer Reputation: Working with reputed firms can improve eligibility.
To improve your chances, maintain a good credit score, ensure a stable job history, and apply when you have completed at least a few months in the new role.
If you are looking forward to getting a personal loan, digital lending platforms like Moneycontrol could be your go-to place. Through the Moneycontrol app and website loans up to Rs 50 Lakhs can be availed. The interest rates start as low as 10.5% per annum. You can apply for a personal loan from eight lenders through the Moneycontrol platform and it’s a 100% paperless process.
Summary
Need quick cash without collateral? Personal loans offer flexible funding with easy digital applications. Learn more about the personal loan verification process to get access to urgent funds.
Disclaimer
This piece/article was written by an external partner and does not reflect the work of Moneycontrol's editorial team. It may include references to products and services offered by Moneycontrol.
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