4 Stages of Personal Loan Verification Process

You may have certain dreams, aspirations and ambitions in your life, which you want to accomplish. You work hard, cut on your expenses and save bit by bit to be able to have enough savings that you can pursue your dreams and fulfil your aspirations but in some cases, your savings might not suffice your requirements. Even if they did suffice, it would be a financially irresponsible decision, if you wiped out all your savings in one go. This would expose you to potential risks in future where you don’t have any cushion to fall back on.

So, what can you do in such a situation, keep on waiting for something to happen on its own or take the reins of your destiny in your own hands. You should organise your finances, then assess your requirements and should Apply for a Personal Loan to meet your upcoming expenses.

What is a Personal Loan?

Personal Loan is one of the most applied for forms of loans in India and is unsecured in nature,i.e., you do not require any collateral to secure the loan amount. The loan amount availed as a Personal Loan can be used for any personal or professional requirements of yours such as home renovation, office construction, payment of bills, international education, destination wedding, and so on. You are free to use the loan amount as per your requirements without any need to inform the lender regarding the same. The repayment tenure for a Personal Loan can extend up to 60 months, and the amount available can go up to 50 Lakhs, depending on your requirements and credit profile.

With the rapid integration of technological progress with the finance sector, you can now apply for Personal Loan at lower interest rates through the company/bank website or various online finance marketplaces like MyMoneyMantra. When you apply online, you just need to provide your necessary information and your application will be sanctioned within a few hours or days (depending on the verification process of the lender) and if you accept the proposal, the amount will be credited to your account on the same day itself. These online marketplaces let you compare various loan proposals before finalising one.

4-Stage Verification Process for a Personal Loan

Due to recent turmoil in the banking sector, due to rising instances of NPAs (Non-Performing Assets), frauds, and corruption, most lenders have now become very stringent in approving an application for a Personal Loan. As the personal loan is an unsecured form of lending, it warrants a rigorous document verification process, which might vary across lenders. Here is a brief overview of the 4-stage verification process for a Personal Loan that is followed by most lenders:

1. Receipt of Personal Loan Application

In order to initiate the verification process, the lender requires a duly completed application form from your side. This application form requires you to provide your 2 passport-sized photographs, KYC documents, income proof, employment proof and other relevant details duly filled in the form. You can choose to fill the form online or by visiting the office or branch of the lender in person.

2. Document Submission

Once the lender receives your application, its team will check your credit score. If the credit score meets their requirements, they will send a representative to your address to collect all the necessary documents for processing the loan application. These documents include the following:

KYC Documents for determining identity, age, and residence proof:

• PAN Card
• Aadhar Card
• Driving Licence
• Voter ID
• Passport
• Registered Rent Agreement

Income Documents

In case you are a salaried employee, you need to furnish the following documents:

• Salary slips for the last 6 months
• IT Return along with Form 16 for the past two years
• Bank Account Statement of the previous 3 months that reflects your salary credits and other income
• Employment certificate from the current employer

In case you are self-employed (professional or business owner), the following documents will suffice:

• Financial statements that include Balance Sheet and Profit and Loss Statement
• IT Returns for the last 2 years
• Proof of continuity of business income such as Bank Account Statement
• Evidence of doing business like GST Registration

Other Documents- 

This includes your loan application form

There might be some other documents also required by the lender, which they shall inform you in advance. While submitting the documents make sure you only provide the xerox copy, duly self-attested.

3. Document Verification

Now, the lender will initiate the verification process. They will send the documents to the verification team, who will visit your address to check if you are living there and will verify all the information they deem important. Then another representative will visit your office as well to check if you are working there.

Your PAN Card, Aadhaar Card, Passport, and so forth will be verified using authorised portals. If the verification team is satisfied with the findings they will send a favourable report to the processing team otherwise they will send a negative report, which will stop the process there only. You will be informed of the rejection of the loan along with the reason for denial.

4. Sanctioning and Disbursal

After receiving the favourable report from the verification team, the processing team will prepare the loan agreement which enlists all the crucial information related to the loan including terms and conditions. You should read this agreement thoroughly before signing. After you have signed the agreement, the amount shall be credited to your account within 24 hours (in most of cases).

Applying for a Personal Loan offers you an excellent degree of flexibility to manage your personal finances effectively and meet any urgent expenses easily. You must take caution to check multiple offers before finalising one particular offer.

Also Read: To apply online for Credit Cards, Home Loan, Personal Loan visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 100+ Banks and NBFCs. We have served 4 Million+ happy customers since 1989.