In the complex world of personal finance, securing a loan can sometimes become a daunting task, and individuals can find themselves navigating through multiple loan portals and, hence, going through a bunch of paperwork.
For an individual, the process of loan approval is quite opaque, and they don’t understand the facts about the criteria that will approve the loan for a person. Hence, it becomes important for a person to learn and know about the loan approval process and to get the right terms for their loan repayment options.
In this blog, we will deal in depth about the loan approval process and how loan agents can sometimes help a customer to find the right offer.
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The Initial Consultation: Setting the Foundation
Consultation is important as, in this phase, a customer gets to know about the terms that different banks and NBFCs provide. Depending on those criteria, a customer can shortlist a bunch of loan providers who can offer suitable rates to the clients.
Here comes a personal loan agent who can guide the customers about the different criteria and can suggest portals that will align with the financial goals of the customer. They can tailor loan solutions by addressing the customer’s problems and can also provide longer repayment options by checking different lenders available in the market.
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Documentation Demystified: What You Need and Why
Documentation is the major step that can determine how fast your loan application can get approved. It’s a good practice to provide all the official documents with the correct information without any flaws.
Identification Documents
The first thing that a person needs is identification documentation, and there, they can provide government-registered IDs or other alternatives that the government offices register. For example, US citizens can provide a social security number as their registered government ID. For India, people can produce their Aadhar ID or driver’s license, which is valid and registered by the government.
These identifying documents register you as a genuine person in the portal of the lender who is making a loan application. With the correct identification ID, a lender gets to know the whereabouts of a person and can learn about the important personal details.
Proof of Income
Proof of income is the next step, which is crucial to verify the customer’s real income deductions and to check the year-to-year earnings. Here, one needs to provide accurate information about their earnings, as it can later be verified when the lender confirms the disbursement of the loan.
Any information mismatch at that step can lead to cancellation, and for that reason, the customer can fail to get the loan in the last step. If the loan amount is quite high, then the person is also sometimes required to provide the last two years’ tax return document to ensure that the individual doesn’t have any tax dues or payments left.
Employment Verification
If a person is working in a company or running a business, then in those instances, one needs to provide a company verification document by showcasing the employment ID card or verify the payslip, which will register the amount of payment and also the fact that you are currently working on that company.
Credit History Information
A credit report is one of the crucial documents that shows a person’s credit history. An individual needs to have a credit history to get a loan. One can get that by keeping credit cards and repaying the dues on time, which will build a good credit score for the person.
There are now loan agents who have done NBFC DSA registration, which can also offer the loan amount from the NBFCs to the customers so that they can have multiple options and can get loans of lower amounts at the initial level.
With this information in place, a lender can decide whether they will sanction the loan to the customer, and then the step of the loan agreement gets initiated. Hence, it shows how proper information and facts can help a person to get loans faster and in a hassle-free way.
