What Is The Procedure To Apply For A Personal Loan?

By Author: Neha Sharma
Total Articles: 218
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"A personal loan is a very popular type of unsecured loan. An unsecured loan is a type of loan in which no security has to be provided by the borrower. A personal loan is the loan of choice for people because the lender does not place any conditions on the final use of funds. The funds borrowed through a personal loan can be used for:

• Medical expenses
• Travel expenses
• Purchasing consumer durables
• Wedding expenses
• Business expansion
• Any other reason

Banks, non banking financial companies, and other lending institutions offer personal loans.
It has become very convenient to apply for personal loan with any lending institution. With the digital revolution, the entire process of loan application, approval, and disbursement of funds has gone completely online. This has made it really easy to apply for a personal loan.

However, before applying for a personal loan, it is important to remember that each personal loan application has an impact on your credit score. While assessing your personal loan application, the lender requests the credit agency for your credit report. Frequent such requests point to a credit hungry individual which can lead to lowering of your credit score. A good credit score i.e above 700 is one of the major requirements for a personal loan. So, before you apply for a loan, it is best to shortlist a few lenders and then make loan applications.

Procedure to apply for personal loan:

You can apply for a personal loan either online or offline.

Online application for personal loan:

Many lenders have a completely online personal loan application procedure. This means you can create an account, fill the form, upload your documents and submit it to the lender. The loan application will be reviewed online and approved online as well.

Some lenders have an online application form with the rest of the formalities completed offline by customer representatives.

Once you fill up the form and submit the relevant documents, the lender will scrutinize your loan application and either accept it or reject it.

Offline application for personal loan:

In this type of application, you need to visit the branch of the lender, fill up the form and submit the relevant documents. If you have a prior relationship with the bank, you can consider getting pre-approved for a personal loan which will reduce the application procedures.

Once the form and the relevant documents have been submitted, the lender will scrutinize the loan application and take a decision.

In both online and offline applications, funds are disbursed in less than a week of approval of the loan. "

Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about personal loan. Through her work, she has explained the procedure to apply for one