Personal loans are a popular way to get quick financial help, whether for a big purchase, unexpected expenses, or debt consolidation. However, one of the most common questions is, "How long does it take to get personal loan approval?" The answer to this question can depend on factors such as the type of loan, the financial institution, and the applicant's profile. This article will explore the personal loan approval time and what affects these timelines
Eligibility Criteria of Personal Loan
Personal loans can be easy to access funds, but meeting the eligibility criteria is essential for approval. Here are the key factors to consider:
Age
To be eligible for a personal loan, an individual must be between 21 and 60 years old when applying. The age limit can vary according to the financial institution’s policies.
Employment
You must have been employed with a public/private company, MNC, or public sector enterprise for at least 2 years. Self-employed individuals need to provide proof of IT returns and business continuity.
Credit Score for Personal Loan Approval
Though no minimum credit score requirement is specified, a higher score boosts the chances of loan approval. A safe credit score range would be between 700-749* for moderate approval chances and 750-800* or higher for strong approval prospects. Ideally, it should be above 750*.
Repayment
You should be able to repay the proposed personal loan EMI along with existing financial obligations. Your debt-to-income ratio should not exceed 50%.
Documents
Valid KYC documents, such as photo ID proof, address proof, bank account statements, salary slips, employment certificates, etc., must be submitted along with the completed application form.
Collateral
Most personal loans, like Shriram Personal Loan, are unsecured loans. Therefore, you do not require any asset, guarantor, or collateral as security or collateral to obtain this loan.
Key Factors That Determine Personal Loan Approval Time
Several vital factors impact how soon you can get an approval decision on a personal loan approval online:
Financial Institution’s Processing Timeline
Each financial institution has its standard process and timelines for assessing loan applications before approving or disbursing funds, which can significantly impact the overall approval timing.
Loan Eligibility Criteria
Extra verification and paperwork may be required if your loan amount is higher, or your profile does not fully meet the bank eligibility criteria. Naturally, this can increase the approval timelines.
Accuracy of Documents
Also, any incomplete or incorrect documents you submit will delay processing and approval, so double-check the requirements beforehand.
Your Credit History
If you have a limited or poor credit history, the bank or NBFC will spend more time assessing your repayment capacity, which can affect timelines.
Your Income Levels
Unstable or low-income levels also call for additional evaluation, causing longer delays in making a decision.
Conclusion
The time it takes to get a personal loan approval depends on various factors, such as the financial institution, your credit score, and the completeness of your application. The personal loan approval process can vary significantly between banks and NBFCs. While some banks, NBFCs and credit unions may take up to a week, others often provide quicker approvals within 72 hours, mainly if all required information is submitted accurately and promptly.
You can significantly speed up the approval process by preparing your documents, filling out your application accurately, and responding promptly to the requests of your chosen financial institution. Understanding these timelines helps you plan better, ensuring you get the funds you need right when needed.
FAQs
What is a personal loan?
A personal loan is an unsecured loan that can be used to meet any financial need. This means you can use a personal loan to pay medical bills, finance a wedding, fund higher education, manage emergencies, etc.
What documents do I need for a personal loan?
Standard documents required are identity and address proof, latest photographs, bank statements, salary slips, tax returns if self-employed, and optionally a guarantor form/letter if applicable based on your profile.
How is the interest rate decided on personal loans?
Personal loan interest rates depend on an individual’s credit score, monthly income, employer profile, loan amount and tenure. Interest rates typically start from 12%*. A higher credit score and income means a better rate and loan terms.
What is the maximum loan amount I can get?
Most banks and NBFCs provide personal loans up to ₹15* lakhs. Maximum eligibility is calculated as a percentage of your annual income. However, factors like existing loans, credit profiles, etc., also determine the final approved loan amount and eligibility.
What are the loan tenure options for personal loans?
The repayment terms of personal loans are flexible and can range from 12 to 60 months, depending entirely on the loan amount taken by the borrower.
