Applying for a new personal loan has become smoother and mostly digital across leading lending institutions of the country. Still, many aspiring applicants fail to furnish the requested details properly, which results in errors, delays and sometimes rejections of personal loan applications.
Here is a simple yet important guide to help aspiring personal loan applicants fill out their applications correctly in easy steps:
1. Gather essential documents to initiate the loan application process
Before you start, focus on ensuring all the required basic paperwork is ready. Most of the lending institutions will request you to submit the following documents:
- KYC documents: This will entail documents such as PAN Card, Aadhaar Card etc., for the proof of identity.
- Income proof: To submit income proofs, you must have recent salary slips, bank statements of the last six to twelve months.
- Proof of employment: To ensure that you clearly establish your employment details, you must submit a soft copy of your original identity card, appointment letter, along with other details as requested by the loan disbursing institutions.
- Proof of address:Recent utility bills, rental agreements, and original ownership papers are also requested by banks to establish one’s residential details.
Having all these documents handy speeds up the borrowing process and helps avoid multiple follow-ups or glitches.
2. Check your current credit score and payment history
You should be clear about your current credit score and recent payment history. Your credit score, ideally 750 or higher, has a significant impact on the approval of personal loans and the interest rates associated with them.
To check your current credit score, you can contact any of the leading credit bureaus, such as CRIF High Mark, CIBIL, Experian, and Equifax. In case your total credit score is less than 650, you should consider improving it before applying to avoid higher rates or rejection of loan applications.
3. Fill out the personal loan application form carefully
Whether you are submitting the personal loan application online or in person, ensure accuracy:
- Carefully match details with your documents, especially data such as name, address, PAN details, Aadhaar number, etc.
- Mention contact details, i.e., phone number and email address, in the form that you are using daily. So that proper verification and communication can be established.
- Avoid mistakes and errors in employment or income details. If in doubt, first discuss the same with the concerned customer service executive of the lending institution before filling out the form.
Even minor mistakes or mismatches can trigger a manual review and slow down the loan approval process.
4. Choose the right loan amount and tenure
To further boost the approval chances, you should:
- Ensure that you apply only for the amount that you can repay comfortably.
- Use personal loan EMI calculators to pick a suitable tenure and total interest outgo.
- Sit down with a certified financial advisor to plan these details out.
5. Review and submit the personal loan application
Before submitting your personal loan application, you should carefully review:
- Recheck all entries made by you.
- Upload clear, legible and easy-to-visualise images, i.e., photographs, Aadhaar details, PANs, etc.
- Ensure that you keep a soft copy of the entire application with you in PDF format.
- Note down the acknowledgement number provided by the financial institution for tracking your application in future.
In conclusion, an accurately filled personal loan application will not only help aspiring borrowers in securing loans smoothly, but it will also help them in securing better interest rates and repayment terms. Following the above steps will make the entire experience of borrowing pleasant and stress-free.