Personal Loans are unsecured loans, where the loan approval is determined by your credit score, income and employment stability. You can consider a personal loan when you need immediate access to funds but don’t want to offer security. Plus, most lending banks allow you to apply for personal loans online through their website or internet and mobile banking portals. Here’s a step-by-step approach that will help you understand the online personal loan application process.
Know the Eligibility
Different banks will have different eligibility criteria for personal loan applications. Typically, this information is available readily on the bank website. Otherwise, you can contact the bank. The eligibility factors include income, working years and credit score.
For instance, the eligibility criteria for HDFC Bank Xpress Personal Loans are as follows:
● Age: Individuals between 21 years and 60 years of age can apply.
● Income: Minimum ₹25,000 per month.
● Employment: Employees of private limited companies and public sector undertakings can apply. Applicants must have a job for at least 2 years, with a minimum of 1 year with the current employer.
Know How Much You Need to Borrow and Calculate Estimated EMI
Understanding how much you need to borrow is the first step in planning your personal loan. Depending on the bank, the maximum loan amount can range from ₹25 Lakh to ₹40 Lakh. However, your eligibility depends on factors like your income and credit score.
To get a clear picture of your repayment plan, you can use a personal loan EMI calculator. It helps you estimate your monthly instalments based on the loan amount, tenure and personal loan interest rate.
Keep Documents Handy
When applying for a personal loan online, make sure you have scanned copies of the documents handy for uploading during online applications. You’ll need:
● Identity/address proof (Passport/voter ID/Aadhaar/driving license)
● Bank statements for previous 3 months
● 3 months latest salary slips
Some banks allow you to upload income documents via Account Aggregators (AA). Here, you simply need to register with an AA and provide consent for sharing your financial documents with the bank. You may need to upload identity and address proof if you’re unable to complete Aadhaar-based eKYC.
Apply with a Bank
You can apply for a personal loan with your existing bank or any other financial institution. Applying with your bank often comes with advantages, such as quicker processing since they already have access to your financial records. However, it’s worth exploring other banks if they offer more favourable terms, such as lower interest rates or flexible repayment options.
You can apply for a personal loan online through the bank’s website. Here’s how you can get started:
Visit the Bank’s Personal Loan portal: Here, you need to start the application process by providing your phone number and an OTP.
Verify Identity, Address and Income: If you’re an existing customer of the bank, your details may be automatically retrieved. As a new customer, you need to enter your personal details, residential address and income details. For income details, you can upload your salary account bank statements or other relevant income proof.
Check Loan Offer: If you meet the eligibility criteria, you will be presented with a loan offer. You can select the desired loan amount and tenure. Check monthly instalment amounts and the interest rate. As an existing customer, your bank may offer a pre-approved loan where additional verification may not be required.
Complete KYC: You can complete your KYC verification via Aadhaar-based OTP. If your Aadhaar is not linked to your mobile number, you can complete KYC by uploading the official valid documents (OVD). You may also have to complete video KYC.
After successful KYC, your loan amount will be credited to the bank account number provided at the time of application.
If you need a loan amount greater than the one offered in the online application process, you can contact your relationship manager or the bank.
Factors to Consider When Applying for Personal Loan
Here are things you ought to keep in mind when applying for a personal loan:
● Credit Score Impact: Your credit score is a reflection of your debt repayment behaviour. It is a three-digit score ranging from 300 to 900 which is generated by credit information companies that have access to your credit record. The higher the credit score, the better your chances of loan approvals.
● Interest Rates: A personal loan is offered at a reducing balance interest rate. This interest rate remains unchanged throughout the tenure of the loan.
● Fees & Charges: Make sure you review all the associated fees and charges beyond interest rates. Lenders charge processing fees which is a percentage of the loan amount. Additionally, check for prepayment charges, late payment fees, GST, etc., beforehand to ensure you’re well prepared and you can avoid unexpected expenses later.
The process to apply for a personal loan is relatively simple if you’re well-prepared and know what to expect. Understand your eligibility and borrowing needs, estimate your EMIs and plan your repayment. Carefully review interest rates, fees and charges and associated loan terms.
With interest rates starting from 10.85%*, HDFC Bank offers a seamless way to apply for Xpress Personal Loans. You can avail of loans of up to ₹40 Lakh and meet a wide range of requirements. Pre-approved customers can get loan disbursal in 10 seconds*. What’s more, you can transfer your existing Personal Loan to HDFC Bank and enjoy attractive terms. Know more about Xpress Personal Loan here.
*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Personal Loan at the sole discretion of HDFC Bank Limited. Loan disbursal is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.