Process of Getting a Loan: Step-by-Step Guide

Loans provide financial assistance to a person who is stuck in an emergency and needs funds to tackle situations. It may be any type like a personal loan for a wedding, a business loan for business expenses, a car loan to purchase a dream car, or a gold loan to purchase gold etc. Applying for a loan needs a lot of processes to follow as you need to ensure that you have all the documents ready with you with the necessary details. You have to understand the complete paperwork as well as guidelines to make everything easy in applying for a new loan. Also, you need to read the terms and conditions of your lender and agreement to get a hassle-free loan.

Here, in this blog, you will learn the step-by-step procedure on how to get a loan with ease.

Necessary Things to Know for Applying for a Personal Loan

Loans offer the best way to deal with financial issues for a business or dealing with personal needs. You should note some necessary things which are required to fill out the application form.

Criteria of Eligibility

It’s the basic things towards filling loan application. The eligibility criteria may vary from one lender to another but the basic things remain the same as a person should:

• Be a citizen of India years of age
• 18 years of age is mandatory
• Have enough funds in hand
• Have a stable income source

Credit score

You must ensure that you have a good credit score before applying for a loan. It’s a 3-digit numeric figure which shows the effectiveness of your creditworthiness. It helps the lender to get a profound idea of whether the individual can pay the debt on time because a good credit holder has managed financial status with a good income source.

Rate of Interest and Other Charges

Interest rate is one of the most crucial factors in getting a loan. Interest rates may vary from one lender/bank to another. Some provide low-interest EMI loans while some offer high. If you want a secured loan, your EMI will be very low because it has collateral value or assets. On the other hand, if you want a personal loan, your interest rates will be very high. Some lenders negotiate interest rates and provide low-interest EMI loans.

Also, you have to ensure the hidden charges like processing fees, prepayment or post-payment charges, Missed repayment fees etc. These things should be considered for taking a loan to get various flexibilities in the loan amount.

Calculate your EMI

EMI should be calculated before taking a loan from a particular lender. You can use an online calculator for the same. It helps you to manage your financials and your income in a manageable way.

Know the required Documents

There are several documents needed for a loan application. Some of them are:

• Identity proof like Adhaar card, PAN, Passport etc.
• Proof of Address like Ration card, passport, Adhaar card, Lease/Rent agreement
• Proof of Income like your salary slips of at least 3 months
• Bank statement details
• 4 passport-sized photographs

Steps to Apply for a New Loan

The application procedure is very easy as you can easily apply for the loan using an online webpage of the lender or the bank.

• First and foremost, visit the lender’s website.
• Then, you have to click the personal loan or secured as per your preference. You can take personal loans for weddings, meet financial goals, deal with emergency issues etc. On the other hand, if you choose a secured loan, you can enhance your business with a business loan, or purchase a brand-new car with a car loan. Both have their own advantages and their demerits.
• Fill out the application form very carefully.
• Now, you have to submit all the documents which are necessary for your lender.
• Next, pay the processing fee.
• You will get the confirmation in your mail. If you apply for a secured loan, it may be slightly complex based on the collateral value.
• Once your loan is accepted, wait for the approval and proceed with onscreen directions.

Summary

Want to apply for a new loan? Know the required documents and necessary steps to follow as the application process may differ from one lender to another. It has some changes based on the type of loan like a short-term personal loan for weddings, a general personal loan, or a secured one like a home loan or car loan.