March 31, 2020
Personal loans are one of the most preferred loans by people due to their easy availability and multipurpose usage for sectors like education, home improvement, emergency and more. They provide applicants with quick financial support and flexible repayment process.
Several banks and NBFC’s offer personal loans but their verification process is very important due to the loan being an unsecured one. However, most of the lenders such as Nitstone Finserve ask for minimal documentation and try to provide an easy verification process for personal loans.
You can borrow up to 25 Lakhs through personal loans and their confirmation process usually differs for each lender. But most of them follow the same pattern for identification and verification.
Steps for Verification Process Of A Personal Loan
There are several steps taken to check the approval of applicants and the loan disbursal process. Below are the steps taken by financial institutions -
1 - Receiving loan application
The first step is to research and learn about the various personal loans available for borrowers. Learn about the interest, features and terms of the loan and then decide on which one suits you the best. It also includes you checking whether you’re eligible for the loan and will be able to repay back the EMIs.
Once you’re clear with the terms and features of the loan, decide on the principal amount you need and talk about the same to your lender. Apply for a personal loan then and fill the application form.
You must complete the application form because only then the financial institution can collect your documents. The lender will process your application upon receiving it and then proceed with collecting the documents to disburse your loan.
2 - Collection of documents
After receiving the application, lenders proceed with collecting the documents for identification and verification of the borrowers. They would also check your credit score and history of your previous loans or credit.
The lender would then send an agent to collect your documents required to get a personal loan. It may include identity, address, income, employment proof, passport size photographs and more.
3 - Document verification
The personal loan verification process starts after receiving all the necessary documents. The lender may take 1-2 days to examine the documents and then send all the details to its verification team. For verification of your address, an agent from the team would visit your residential address and verify the address in person.
Other documents such as PAN card, Aadhar card, income slips, passport, driving licence and more will also be a subject of verification. A representative may even visit your workplace to verify if you work there.
After this process is completed, the investigation team forwards all the details to the loan officer in charge of the borrower’s account. If the verification is successful, the loan amount will be disbursed to the applicant’s account. Otherwise, it will be declined and the applicant will be told about the reason for disapproval.
4 - Disbursal of loan
This is the last stage of the personal loan verification process. The banks and NBFCs approve the loan disbursal once all the documents are verified and match the eligibility and requirements of the loan.
The loan agreement is made which the applicant needs to sign. It contains all the information about the loan such as its amount, fees and charges, interest, tenure and more which is agreed upon by both the lender and borrower. You must read this document properly before signing it.
The personal loan is then credited to the applicant’s account within 24 hours.