So, you clicked “Apply Now” on that personal loan ad.
What happens next? Silence? Waiting? Stress?
Let’s demystify the loan approval process. It’s more high-tech (and fast-paced) than you think.
Step-by-Step: Loan Approval Journey
1. Application Received
Once you submit the form:
Your basic details (income, age, employment) are collected
The lender assigns your file a unique application ID
2. Credit Score Check
This is the make-or-break moment.
CIBIL or Experian score is fetched instantly
A good score (750+) fast-tracks approval
Low scores? Expect extra scrutiny or rejection
3. Document Verification
The backend team reviews:
PAN, Aadhaar, salary slips, bank statements
Employment verification via HR or bank salary credits
KYC (Know Your Customer) checks
4. Automated Risk Assessment
Using AI and fintech algorithms, lenders now:
Score your income-to-loan ratio
Look for red flags (e.g., too many loans, late payments)
Predict your repayment behavior
This step decides your loan limit, tenure, and interest rate.
5. Tele-Verification (Optional)
Some lenders might call you to:
Confirm details
Cross-verify income or employment
Prevent fraud
6. Approval or Rejection
You get notified via SMS/email:
If approved, your sanction letter is generated
If rejected, some NBFCs may offer alternatives (like a lower amount)
7. Loan Disbursal
After e-signing your agreement:
Funds are usually disbursed within 24-48 hours
You receive the amount in your bank account
EMI schedule is shared via mail or app
🔑 Pro Tips to Speed Up Your Loan Process
✅ Maintain a credit score of 750+
🏦 Keep 3 months’ bank statements handy
📤 Upload clear, legible documents
📱 Respond quickly to verification calls or emails
🧾 Avoid applying for multiple loans at once (hurts your score)
📊 Infographic Summary
| Step | Action Taken |
|---|---|
| 1️⃣ | Application Received |
| 2️⃣ | Credit Score Pulled |
| 3️⃣ | Document Review |
| 4️⃣ | Risk Analysis via AI |
| 5️⃣ | Optional Phone Call |
| 6️⃣ | Loan Approved or Denied |
| 7️⃣ | Money Disbursed |
❓ FAQs
Q1. How long does loan approval take in India?
For digital lenders, approval can take a few hours to 2 working days if documents are complete.
Q2. Can I track my loan application?
Yes, most lenders offer application tracking through SMS or their website/app using your reference ID.
Q3. Will checking my credit score affect my chances?
No. Soft inquiries (like checking your own score) don’t harm your credit. Only hard inquiries by banks do.
Q4. What gets loans rejected the most?
Common reasons: low credit score, unstable income, incomplete documents, or existing high EMIs.
Published on : 30th July
Published by : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed