Persona Loan Verification Process - Steps and FAQs

Individual borrowers usually prefer personal loans more than other financing options to finance their urgent need for funds. The popularity of personal loans is fueled by the fact that they are unsecured loans. This means that the borrower is not required to submit any collateral against the loan.Since there are no securities in case of loan default, the lending institutions remain careful during the verification process before disbursing the loan. The personal loan verification process usually involves the following stages,

The borrower needs to apply for a personal loan with the lender. Many lenders today provide the option of applying online. After submitting the loan application form, you will be provided with an application ID. You can use this application ID to track the status of your application.

Once the borrower submits the loan application, the lender begins collecting documents from the borrower. The lender may send a representative to collect the documents or ask the individual to submit them in person at the office. The following documents are generally required for a personal loan.

• Proof of Identity PAN card, Aadhaar card
• Proof of Address Aadhaar Card, electricity bill, etc., usually suffice as valid address proof.
• Present Employment Proof Appointment letter, employment identity card, certification from the employer stating the nature of employment.
• Proof of Income Salary certificate, latest payslip, Form 16, Income tax returns, etc., are asked from salaried persons.In the case of a self-employed person, the lender might ask for a business ownership certificate, partnership deed, profit and loss statement, audited balance sheet, etc.
• Photographs Photographs of the potential borrower.

Once all the relevant documents are received, the lender begins the verification process by forwarding the documents to the verification department. Lenders usually have a separate team for conducting verifications on their own.

• Online Verification Verification of government documents like PAN, Aadhaar, or Passport is usually done online through the respective online portals.
• Offline Verification The verification team visits the borrower’s residence to verify the residential address. The team can also visit the borrower’s place of work to confirm whether the person actually works there. The verification team can also enquire about your salary or the number of years of your service in that organisation.

The verification department compiles all the findings of the verification process and forwards them to the personal loan officer who is in charge of that particular account. If the lender is satisfied with the findings of the verification process, then the loan will be processed.Alternatively, the loan application will be rejected if the lender is not satisfied with the findings of the verification process. However, the lender will communicate the reason for the rejection so that the borrowers can correct any mistake from their end.

This is often the last stage of the verification process. The final loan agreement is drafted after the personal loan officer receives a positive report from the verification team. At this stage, the interest, loan repayment tenure, additional fees and charges, and the EMI amount is mutually agreed upon by the lender and the borrower.Before signing the loan agreement, the customer should carefully go through the terms and conditions. Once the customer signs the agreement, the lender transfers the personal loan amount to the customer's bank account within 24 hours of a business day.Every individual should take the personal loan verification process seriously as the main screening of applications is done at this stage. One wrong step and the borrower may miss the chance to get the desired loan amount. Therefore, put the documents in order, take the time to sort out any potential issues, and close the deal with the lender.