The Historical loan process and Today's loan process for a Personal Loan

The below is checked by every financial institution before giving a loan:

1. CIBIL Score and Report: A CIBIL score is a number of 3 digits ranging from 300 to 900. It measures your ability to pay back the amount you borrowed. An ideal score ranges between 750 and 900. This is one of the key factors affecting your approval of your loan. A positive indicator of your credit health is a good credit score and report.

2. Status of work: On giving a loan, if you are working with a reputed firm, name it an MNC or government job, the lender has better trust. Besides a good credit history, lenders check your stable income and employment status.

3. Account details: Lenders are carefully examining the suit filed or written off cases. The lender checks the account details carefully to reduce the risk of not getting back the payment. In applying to the financial institution, ask for specific documents, including previous months’ bank statement.

4. History of payment: The history of payment is checked to know how borrower behaviour is in terms of paying back the EMI. Lenders check for any default in overdue cases, and the overview of your complete report might be harmful.

5. EMI to Income Ratio: Income plays an important role; if the income is low, then the borrower’s chances of not paying the EMI is high. Banks also consider the share of your previous debts compared to your salary when applying for the loan. If your total EMI exceeds your monthly salary by 50%, your loan approval chances are decreased.

A personal loan is different from other loans because of its nature, i.e., an unsecured loan. A secured loan is a type of loan that requires collateral while applying for the loan. The tenure, rate of interest , loan amount etc., differs from lenders to lenders, such as car loan, home loan, pension loan, agricultural loan, educational loan, medical loan, etc. On the other hand, an unsecured loan is a type where the individual needs not to submit collateral while applying for .in certain exemptions like a defaulter applying for a loan has to submit collateral—for example, a personal, commercial loan.

The process of applying for a personal loan is stated below:

1. You are checking your credit score: The first step is to check the borrower’s credit score to determine if the person is healthy to pay for the loan repayment on time. It is three digits ranging from 300 to 900. It measures your ability to pay back the amount you borrowed. An ideal score ranges between 750 and 900.

2. Shop around to find good deals: As the market is vast, there are many new deals. To better assess and avoid the pattern through prequalifications, we need to monitor the possible options carefully.

3. Compare additional offers: When you compare the loan to other loan policies, you can get the best deal at the best price. Dena Bank Personal Loan is one of the best.

4. Document collecting: Few documents must be submitted when applying for a loan. Documents like income evidence, identity evidence are necessary. If the borrower has a history of the loan, the borrower must provide a document proving it.

5. Completion: After the enterprise’s end, the borrower can select the online method for applying for the loan or apply for the loan using an offline method. The person must follow and continue with the others given by the lender.

6. Waiting for cash: The lender can quickly accept the application after completing and following instructions. In a short time or even in a matter of hours, one can receive the fund. Depending on companies, this can vary.

Conclusion:

The main important factor every individual should consider is their credit score; they won’t pass the first step of a personal loan process if they have a low credit score and have a high Personal Loan Interest Rate.