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| May 20, 2024

How Long Does a Personal Loan Take to Process

In today’s time, financial emergencies can occur at any moment in an individual’s life. From sudden hospitalisation to unplanned travel, or higher education to a cash crunch in business; the reason could be anything. Sometimes, the savings you have might not be enough to cover these unforeseen expenses. This is when the need for some additional financial aid arises to sail through. There are several different options that you can consider, with personal loans being one of them.

What is a Personal Loan?

A personal loan is a financial product that allows you to borrow a lump-sum amount for a certain period of time. Unlike other popular types of loans, you don’t need to give any specific reason for obtaining the loan. These loans can be availed for a variety of reasons and can be repaid in regular installments. For instance, you can arrange funds for your home renovation, business expansion, or any other expenses. Some people also use personal loans online to consolidate their existing debt.

Given the increasing popularity of personal loans, a number of lending institutions are offering several loan schemes with lucrative rates of interest. However, the rates of interest and loan amount solely depend on a borrower’s repayment capacity.

Now that you have an idea about personal loans and the benefits they offer, the next question arises: ‘How long does a personal loan take to process?’ Here’s a detailed explanation to demystify the approval process and give you better clarity:

Getting Your Personal Loan Approved

There are a few simple steps that you need to follow in order to get your personal loan approved. This process starts with checking your eligibility for a personal loan, followed by submitting an application. Nowadays, all banks and NBFCs offer the option to apply for a personal loan online.

After that, you need to submit all the relevant documents. In the case of a personal loan documentation is the most important part, as this is when the lender checks your creditworthiness. Although the list of required documents can be different for different lenders, a few things always remain the same. You need to submit documents like ID proof, address proof, income details, bank statements, etc.

Once all of this is done, the bank or NBFCs will approve your loan application, and the loan amount will be disbursed shortly. Generally, this process can take 5-7 working days, but this duration can slightly vary depending on several factors. If there are any discrepancies in the process, the loan approval can take a little longer than usual.

Things to Keep in Mind

The time required for your personal loan approval depends on several factors. There are a few things that you should keep in mind to shorten this time and improve your chances for loan approval. These are:

Maintain a Good Credit History

Since it is an unsecured loan without any collateral, your credit history is one of the key determinants of your loan eligibility. To ensure faster loan disbursal, maintain a good credit score. There are several ways to do this, and making timely payments on your credit card(s) and any other existing loans is the most effective one.

Have a Stable Income Source

In the process of personal loan approval, the most crucial step is checking the repayment capacity of the borrower. The lending institution will do a thorough background check on the basis of the income proofs you provide. So, if you’re applying for a personal loan and want quick approval, you need a stable income source. 

Provide All the Necessary Documents

Like any other type of loan, this financing option also has certain documentation requirements. To make sure that there are no unwanted delays in the process, submit all the relevant documents. Also, you need to ensure that there are no discrepancies, as this can affect your loan approval negatively.

Opt for a Lender with a Quick Loan Approval Policy

The turnaround time for a particular type of loan can vary from one lender to another. This mainly depends on the process that a particular bank or NBFC uses for loan approval. So, it is always recommended to go with a reputed lender. They not only have a shorter processing time, but they also offer better interest rates.

Are you also looking for an instant personal loan to take care of a temporary financial crisis? If yes, Muthoot Finance has got your back with highly competitive interest rates. The best thing is that you can get a personal loan online without having to step out of the house. You can explore all our loan schemes and make a choice. Alternatively, visit the nearest Muthoot Finance branch to know more. 

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