How To Function With The Personal Loan Disbursement Process?

How To Function With The Personal Loan Disbursement Process?


Before planning to go for a personal loan, it is very important to know all about the loan, the entire approval process, along with the disbursal and repayment.

If you opt for a personal loan to cope with a financial emergency, you should have proper, complete knowledge of the loan disbursal process. This will assure that the loan amount you receive is in time and can be managed during an emergency. Also, people have an option to apply personal loan online which is quite useful.

Understanding personal loans process better:

1. Opting for a personal loan:

The initial step of the loan disbursal process involves the loan application.

You are required to select the most appropriate lending firm after which it is necessary to apply for the personal loan. 

The application form is required to be filled correctly. After which you have to submit all the required documents.

The documents include:

  • Identity proof.
  • Income and address proof.
  • Bank declarations and statements.
  • Income tax returns.
  • Photographs as mentioned.

2. Loan approval process:

Once the application is filled and the documents submitted and evaluated, the lending firm then starts the approval procedure. 

The duration that a particular lending firm takes totally varies from one to another. The approval process might take two to three working days.

In case the documents are not in order or have some complications, the process might take even longer. This is why it is advised to check the documents properly before submitting them for the loan process.

If you are not new to the lending firm, that is, already have taken loans or dealt with the firm, then the process is mostly simpler and faster. 

To take an example, the customer has the opportunity to take a personal loan from the same lending firm in the existing Savings or Salary account.

3. Loan Disbursal:

As soon as the loan is approved, the lending firm issues a sanction letter to you by means of either email or by post. The sanction letter basically contains all the information and states that the loan has been approved.

The details mentioned include the interest rate, the loan amount, the EMI that is equated monthly instalment, etc.

After the approval, the time for personal loan disbursement may range from one to two working days.

After then can the customer collect the cheque for the loan amount decided by the lending firm.

Many lending firms also mail the loan cheque to the address provided by the individuals.

In recent times, the lending banks and firms have now started to deposit the loan amount to the borrower’s bank account directly.

After the loan disbursal and loan confirmation:

What comes after the loan confirmation is the process of loan repayment, which is paying back the loan amount borrowed along with the interest rate implied on it.

This has to be paid within the tenure assigned according to the loan agreement.

The EMIs or the equated monthly instalments can be paid either through the medium of ECS, an electronic clearing service or post-dated cheques.

In the case the individual already has had an account or other formal relation with the bank, then he or she has the chance to give proper instructions demanding an automatic EMI debit for every month on a particular fixed date.

It is advised to pay the monthly instalments on time as the delayed payments result in penalties which is not even good for the future credits.


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