Personal Loan Application Procedure:What to Do Before, During, and After You Apply

Applying for a personal loan for the first time can feel unclear — you know you need the funds, but the actual process for personal loan approval, what to do first, what documents to arrange, and what happens after you submit, is not always obvious until you are already in it.

This article covers everything from what you need to prepare before applying, how to get a personal loan as a first-time applicant, and what to expect after your application is submitted.

Start With a Definite Number, Not an Estimate

Before you look at any lender's website or fill out any form, figure out exactly how much you need. Not approximately. Not "somewhere around two lakhs." An actual number tied to actual expenses.

The reason this matters: your EMI is calculated on that number. You should ensure you are able to pay that amount per month alongside your other expenses. A commonly referenced guideline in personal finance suggests keeping total EMI obligations within 30–40%* of take-home pay, though individual circumstances vary.

You can use a personal loan EMI calculator to test different combinations. Enter different loan amount, tenure, and interest rate and see what lands in a range you can genuinely manage every month without cutting into rent, groceries, or other EMIs you already have running.

Pick a tenure that fits your situation. A shorter one means higher EMIs but less interest paid overall. A longer tenure brings the monthly number down but stretches out the total cost. Neither is universally right, it depends on your income and what your budget can handle.

Check Your Credit Score — and Know What It Means for Your Application

Your credit score is one of the first things a lender looks at. A score of 700 or above may generally be considered favourable, though the final assessment depends on the lender's criteria. Below that, you may still get approved, but the interest rate offered may be higher.

You should also check your report for any errors. An old loan marked as overdue when you cleared it years ago. A credit card you closed still showing as active. These things drag your score down without your knowledge, and they are fixable if you catch them before a lender does.

If your score is lower than you would like, paying down outstanding balances and clearing any overdue amounts may have a positive effect on your score over time, though results vary by individual credit profile, before you begin the personal loan application procedure.

Also Read: Impact of Credit Scores on Personal Loan Approval

The Documents You Will Need

Getting your documents in order before starting the application is genuinely one of the most useful things you can do. Missing a single document mid-process may slow everything down.

Here are the documents needed for personal loan application:

• For identity — Aadhaar, PAN, Passport, Driving Licence, or Voter ID. Any one of these works.
• For address — Aadhaar, Passport, Driving Licence, or a recent utility bill (electricity, gas, telephone). Bank statements showing your current address are also accepted.
• For income — three months of salary slips if you are salaried. If you are self-employed, your Income Tax Returns.
• Bank statements from the last six months. These show your income pattern and any existing loan repayments going out.
• A recent photograph — either passport-sized or a selfie depending on how you apply.
• A cancelled cheque or eNACH form for setting up the auto-debit on your repayment.

The Personal Loan Application Process: Step-by-Step

The application process is different for different lenders but here is what is generally looks like:

• Step 01: Register using your mobile number.
• Step 02: Enter your PAN and personal details.
• Step 03: Enter loan details, like the desired loan amount and tenure.
• Step 04: Complete your KYC and enter your employment details.
• Step 05: Your personal loan voucher will be generated and one of our customer care executives will reach out to you to take the process ahead.

At Shriram Finance, personal loans are available up to ₹10* lakhs with tenures up to 60* months. Apply Now!

What Happens After You Apply

Once your application is submitted, the lender typically moves into a verification phase. This may include a review of your documents, an income and employment check, and a credit assessment. The time this takes can vary depending on the lender and the completeness of your application — having all documents ready and consistent tends to speed things up.

If the application is approved, a loan agreement will be shared for your review and acceptance. Read through the terms carefully before signing — the interest rate, tenure, processing fee, foreclosure conditions, and any other charges should all be clearly stated. Once signed and processed, the loan amount may be disbursed directly to your bank account.

Set up auto-debit. The auto-debit handles the monthly payment automatically, so there is not much active management needed. If an EMI bounces for any reason — insufficient balance, a banking issue — sort it out quickly. A missed payment hits your credit score and attracts a late fee. Two or three missed payments in a row becomes a more serious problem.

Common Personal Loan Application Mistakes That Slow Approval (or Hurt Your Score)

Applying to four lenders on the same day. Each application is a hard inquiry. Multiple applications in a short period of time can drop your score by enough to affect the terms you get offered.

Submitting documents in a rush. Do not submit the documents in a rush. Take your time to identify what you need to submit and upload it properly.

Borrowing more than needed because the upper limit is available. Just because you are eligible for ₹10 lakhs does not mean you need to borrow ₹10 lakhs. Borrow what the expense actually requires.

Conclusion

Knowing how to get a personal loan comes down to preparation more than anything else. Get your credit score in order, gather the documents needed for your personal loan application, check eligibility before applying, and go through the terms carefully before signing. Those steps alone take care of most of the things that slow applications down or lead to rejections.

If you are looking to get a personal loan, Shriram Finance offers personal loans at competitive interest rates, flexible tenures from 12 to 60* months, and a digital application process that can be completed from your phone. Check your eligibility on the Shriram Finance website and start your application today.

FAQs

I have never taken a loan before. Does that affect my application?

Having no credit history is different from having a bad credit history, but it does make assessment harder for a lender since there is no repayment track record to look at. For first-time applicants, a stable income and clean banking history help considerably in this situation.

My income comes from multiple sources. How does that affect my personal loan application procedure?

Lenders typically assess repayment capacity based on verifiable income — usually what shows up consistently in your bank statements. If you have income from multiple sources, it may help to have documentation for each. Check with the lender directly to understand what they can consider during the assessment.

How to get a personal loan if I already have one running?

Having an existing loan does not disqualify you, but your current EMI obligation factors into the debt-to-income calculation. The lender will assess whether your income comfortably supports both repayments before approving.

Is there a difference in procedure for a personal loan used for a specific purpose versus general use?

Not really. The application process is the same regardless of what you plan to use the funds for. You generally do not need to provide proof of the end use for a personal loan.

What happens if my application is rejected?

Check with your lender about why your application was rejected and take time to improve your profile. Try to avoid applying elsewhere immediately. Applying again right away just adds more hard inquiries without improving your chances.