The entire personal loan process completes in around 2-7 working days. However, digital loan processing does not take more than two days. Infact, pre-approved personal loans offered to select existing customers of banks and NBFCs are processed and disbursed instantly. But many-a-times the applicants face delays in their personal loan processing even after timely submission of loan application. Below-mentioned are a few points that would explain the reason behind the delay in the loan processing.
What Delays Personal Loan Processing
Skipping Pre-approved Offers
Pre-approved personal loans are offered to select existing customers of banks and NBFCs based on their creditworthiness. These loans are accompanied with zero documentation, quick loan processing and instant loan disbursal. Applicants should check for pre-approved offers with the lenders where they already have their current/savings/loan/FD accounts or have availed a credit card. They should also visit online financial marketplaces like Paisabazaar to compare and choose the pre-approved offers by top lending institutions for quick loan processing.
Choosing Traditional Banks
Applicants applying for personal loans through traditional banks can face processing delays due to manual document verification process. However, fintech platforms such as Paisabazaar follow end-to-end digital processing which results in quick loan processing and loan disbursal within 24 hours.
Having a Poor Credit Profile
A strong credit profile is very important for personal loan approval. Lenders usually offer personal loans to applicants having a credit score of 750 and above at low interest rate. However, applicants having a poor credit profile have to face difficulties while securing personal loans. The lenders either reject their personal loan application or offer them higher interest rates. Therefore, applicants should repay their credit card and loan dues on time to avoid any default. They should also avoid taking multiple loans in a short period of time to maintain a strong credit profile.
Taking Multiple Loans in a Short Span
Applying for multiple loans in a short span reduces the creditworthiness of the applicant. Lenders carry a hard enquiry for each loan applied. For every hard enquiry the credit score of the applicant is reduced. Multiple loan applications reflect that the applicant is short of funds and hence is at a higher risk of loan default. Hence, the loan application is put on hold which delays the entire loan process.
Incomplete Documentation
The personal loan documents vary from lender to lender. The common documents required by most of the lenders include, Aadhar card, PAN card, Passport, Voter ID, Utility bills (electricity, gas, telephone), latest salary slips, ITR, employment proof, business proof, etc. Applicants should create a checklist of the documents required before submission of loan application. Most of the times submission of wrong documents or incomplete documents delays the loan processing.
Conclusion
Avoiding the above-mentioned mistakes can prevent any delay in the loan processing. Applicants should maintain a healthy credit profile, check all their documents before submission, opt for the right lender and avoid applying for multiple personal loans at the same time for quick loan processing and disbursal process.
