How Can I Apply For A Personal Loan?

Sailun Tires

Personal loans are unsecured loans that allow the borrower to make use of his creditworthiness. It is an easy way of getting money without pledging any collateral. The approval process is straightforward and usually takes less than 24 hours. Once approved, you can expect your funds within 1-3 business days, depending on your transfer method.

However, a personal loan has some disadvantages. For example, it involves high-interest rates compared with secured ones; this leads to an increase in EMIs depending on the amount you borrow. Let’s have a look at how to apply for a personal loan:

Prepare Your Documents

Before applying, ensure that you have all these documents ready so that the approval process becomes smooth. These documents include:

  • Identity Proof (anyone)
  • Address Proof (anyone)
  • PAN Card
  • Salary Slips for the last three months
  • CCA certificate of any bank account if it is required by the lender you choose.

Prove Your Creditworthiness

Before applying, ensure that your credit score is maintained between 600-700 or higher to get the best rates. Improving your credit score is possible by paying your EMIs on time, maintaining low utilization in all the loans you have availed.

Your credit score will also improve by repaying your loans on time and not resorting to any debt settlement tactics.

Choose Your Lender

Several financial institutions give personal loans. Some of them offer instant approval facilities, while some take days to process the loan application.

The most important aspect is your creditworthiness, so choose a lender who gives you the lowest interest rate with no or minimum charges for processing fees and late payment charges.

You need to check your creditworthiness before applying to choose the lender who is offering the best rates. There are many elements to the quoted rates, including your credit rating, monthly or annual income, other outstanding loans you have taken recently, and the lender’s assessment of your ability to repay.


Some lenders give instant approval to check your creditworthiness and approve your loan instantly, while some take time to process the documents and later send you an approval letter.

Some of these lenders also offer online facilities which allow you to apply online and know whether you are approved or not. Once your application is approved, the bank staff will pass it on to the loan processing department, where they will check for any discrepancies in your documents before disbursing the funds.

You can expect your funds within 1-3 business days, depending on the method of transfer you choose.


The bank will instantly transfer your loan amount to your account. Most lenders do not offer you any grace period, so be careful and ensure that you repay your loan on or before the due date. Otherwise, the bank will charge an interest rate applicable to the late payment, and if the amount is still not paid, then a penal charge may also apply.

Some financial institutions give post-dated cheques, so once you receive them in the mail, deposit them as soon as possible to avoid any delay between payment dates.

Check The Format Of Documents From The Lender

When you finally get your documents from the lender, check all the details very carefully because sometimes they send the wrong documents by mistake. The bank will send a check which you have to cash at the bank instead of depositing it. Always remember, the better your creditworthiness is, the more choices you have.

You should compare personal loan terms before applying for one. The interest rate you pay at the time of repayment is higher than the interest rate you pay when repaying your EMI. You can also apply for several loans and consolidate them to get a lower interest rate and a more manageable loan repayment schedule.


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