With the emergence of various players in the lending market, there is a lot of competition. While selling the product, the representatives will claim that the TAT for a loan will be the shortest in that particular bank. What is the TAT Full Form? TAT is the time employed to go through a process from the start to the end.
TAT Full Form is Turn Around Time. It is a common utterance when you approach a bank or bank representative for a loan. They claim that the TAT for a particular loan will be the least when compared to the other banks. What does this mean? They mean to say that the time taken for processing the loan from the start till the end, i.e., from the submission of the loan application along with the supporting documents till the loan disbursement, will be the shortest when compared to other banks.
Some of the banks claim that the TAT for personal loans is just a few hours. Finservs are a step further. They claim that the turnaround time for Personal Loans is just a few minutes. You apply for a personal loan online, and the money will land in your bank account within minutes. This is what they promise. The turnaround time for a personal loan can still be estimated as the documents to be verified will be very few. But for a secured loan like a home loan, it will be a bit tricky as it depends on factors like the legal vetting and valuation happening on time.
The following are the elements involved in deciding the TAT.
Submission of loan application
The first step of the loan journey is the submission of a loan application. The loan application is to be duly filled with the details required. No mandatory field has to be left blank. On completion, the loan application has to be submitted along with the supporting documents specified for the particular loan (if you are submitting the loan application offline)
This step can be completed faster for a personal loan as the number of supporting documents are few. But in the case of secured loans like vehicle loans and home loans, the supporting documents are many. Checking the correctness of the documents submitted itself will take a long time. The countdown of the TAT starts with this step.
If you are submitting the loan application online, you will have to wait for the representative of the bank to call on you to collect and verify the supporting documents. This will involve more time.
Call from the Representative of the Bank
If you submit a loan application online, there will be a time-lapse. You will receive a call from the representative of the bank. He/she will give you a brief about the loan. You will be able to negotiate the terms with the representatives, after which a list of documents will be given for submission. Either the representative will visit you to collect the documents, or you will have to submit the documents at the bank branch.
Verification of Documents
The bank will verify the correctness of the documents. If any of the documents as per the list are missing, then the bank will instruct you to submit those documents. There will be some time lost here.
Legal Vetting of Property Documents
To ensure the marketability of title deeds, legal scrutiny of the property documents will be done by the bank’s panel advocate. This process will take time. If there are any issues with the property documents, there will be a further delay.
Valuation of Property
Since the loan amount is related to the value of the property, valuation of the property will be done by the panel valuer of the bank. Only on ascertaining the market value of the property, the loan amount will be decided, and the processing will continue.
Execution of documents
After the above steps are completed, and the bank has approved the loan, you will have to execute the loan agreement and other legal documents stipulated for the loan that you have applied for.
After execution of the legal documents, the loan will be disbursed to your bank account or directly to the builder/seller, as the case may be.
As explained above, the turnaround times are different for different loan schemes. TAT for loans like personal loans is very less as the process involved is not elaborate. Whereas, for secured loans like home loans, the turnaround time is considerably higher. Sometimes it may take months to establish the correctness of the legal documents, and the turnaround time will be much higher, obviously.
Ensure to fill up the loan application completely without leaving gaps and the correctness of the documents submitted if you want the loan to be disbursed within the shortest TAT. Now that you know the TAT Full Form and the elements that impact the TAT ensure to be equipped as required before submitting the loan application. This will reduce the turnaround time, and you will get the funds into your bank account at the earliest.