Personal Loan

How Do Banks Review a Personal Loan Application?


You can use the money you borrow from a personal loan application to pay for anything—from a long overdue home rebuilding project to urgent medical expenses, a new start-up, a much-needed vacation, or anything at all. However, the outcome of your application for a personal loan from a bank depends on the results of the client verification process.

We’ll examine the several criteria that banks use to evaluate a borrowers’ applications for personal loans.

Points Reviewed by Banks Before Approving a Personal Loan Application 

Here are certain factors that can influence the result of your personal loan application.

  1. Credit Score

Your credit score is crucial for the approval of a personal loan. It helps lenders track your creditworthiness. The credit score depends on how the user has previously managed their credit. The thumb rule is that the higher the credit score, the better the chances of getting the loan approved. If the payment record is good, then loan approval is easy.

  1. Repayment Schedules

Lenders prefer shorter repayment cycles or loan terms. A shorter payback period means that the lender can get the loan back quickly. However, the payback period should not be too tight. It might make your EMIs unrealistic.

  1. Personal Loan Documentation

All necessary papers, like your PAN card, photo ID proof, address proof, and financial records, should be in order at the time of applying for a personal loan. The loan officer will verify them. If there is any issue with the documents, your loan application will likely be rejected.

  1. Employment Background

A borrower with considerable work experience will have the edge over a new hire. While getting the loan, a new startup may face some issues compared to a successful business owner. Also, an application from a freelancer has a higher chance of getting rejected as compared to one from a salaried employee, especially a government sector employee.

How to Apply for a Personal Loan Online? 

Banks always ensure it’s easy and quick to get a personal loan. You can stay at home and still get all the money you need with the help of online personal loan login.

All you have to do is follow the steps below to log in to the bank’s website and file a personal loan application:

  1. Visit the lender’s website for an online personal loan.
  2. Click on the personal loan section.
  3. Select “Apply Now.”
  4. Choose whether you are a salaried or self-employed person.
  5. Fill in your personal information.
  6. Choose the loan amount and tenure.
  7. After that, you will need to upload the required documents. This includes your PAN card, Aadhaar card, proof of address, proof of income, most recent pay stub, most recent three months’ bank statements, and degree certificate.
  8. The loan application will be reviewed by a team of experts at the bank or NBFC.
  9. Once the personal loan is approved, the money will be sent to your bank account.

Advantages of a Personal Loan Application

Here are some advantages of obtaining a personal loan.

Quick & Easy

Personal loans can help you save time and effort. You can use the personal loan login facility online and apply for it from the comfort of your home. You can get the money in a few hours or days. Personal loans can be used right away. 

You must fill out a loan application and show proof of identity. The lender looks at your credit score and credit history. If the loan is approved, the lender puts the money into your bank account. The process is very simple and quick. There’s no need to go to the bank when you need cash quickly.

No Security Required

Personal loan applications don’t require collateral, and you can obtain a loan up to Rs. 30 lakh. It is an unsecured loan that you can secure without much hassle, unlike other loans.

No Limitations on Use

A personal loan can be used for various financial needs. This is because they are flexible and easy to get. For example, you could use them to buy the newest phone or fix your house. When you login for a personal loan online, the application doesn’t ask you why you want it. So, you can use the money for more than one thing. For instance, you could use some of it to buy a new bike and use the rest to pay for your next trip. The choice is up to you.

Minimal Paperwork

Personal loan applications require minimal documentation. Your credit score and credit history mainly determine if you can get one. If your credit score is good, you can easily get a loan for a large amount. Getting a personal loan is much easier than getting a business or home loan. Hence, you can apply for a personal loan online and not worry about being turned down.

Affordable Interest Rate

Depending on your credit history and the loan amount, you may get a good interest rate on a personal loan. You have nothing to worry about if you have a steady income, a good financial situation, and a high credit score. You can get a low-interest loan, making it easy to fit it into your budget. Settlement terms are flexible and can be extended for up to 60 months. This gives you plenty of time to pay off your debt. It can be a good way to get money in an emergency or make your dreams come true without any debt.


Personal loans are a great choice for many people. It offers instant relief from your financial crunch and helps you save time, money, and effort. You can even combine multiple loans into one with lower interest rates. The best part is that you can use a personal loan for any purpose, whether home improvement or buying a new car. Apply today.

For more assistance, login for a personal loan on Piramal Finance! Get loans at an attractive interest rate and repay them at your convenience.