Learn Everything About Personal Loan Disbursal Process

The two noteworthy features of a personal loan are quick approval and fast disbursement. No wonder most people turn to this financing option when they need money for urgent needs or an exciting vacation. In addition, if you own a business, a personal loan can assist you in dealing with cash flow issues and in taking advantage of every business opportunity that comes your way.
 
In order to make the most of a personal loan, it is necessary to understand the steps involved in the personal loan disbursement process. But first, let's discuss the factors that influence loan disbursement.
 

Factors Affecting Personal Loan Disbursement

The lender considers multiple factors when determining the personal loan amount. Amongst them, the most common ones are described below. 
 

1. Income

Each lender has a different minimum income requirement. It assists them in determining whether you are capable of covering the EMIs once the disbursement is made. Most lenders typically require a monthly income of Rs 15,000 or higher. However, they also look at how much money you have left after paying off your current debts and covering basic expenses. If the leftover income is sufficient, then only you will be approved for a loan. 
 

2. Credit Report

Your lender needs to understand your credit behaviour before making a personal loan disbursement. And a credit report can help them with this. It includes information about debt repayment patterns, loan settlements (if any), moratoriums, hard inquiries, and previous debt defaults. Poor credit scores reduce your chances of receiving approval for a personal loan.
 

3. Age

Your earning potential is directly proportional to your age. It is typically difficult to manage your monthly debt obligations if you are under the age of 21 or if you are about to retire from your job. As a result, the lender will hesitate in sanctioning a loan to your profile.
 

4. Loan Amount

Although most lenders offer personal loans up to Rs 5 lakhs, the approval limit is determined by your eligibility criteria. If you barely meet the qualifying criteria, the lender will not take on higher credit risk and may not approve you for the maximum loan amount they offer.
 

5. Repayment Tenure

If you have a low income, the repayment period you choose is critical in determining the amount of the disbursement. If your requirements are greater, but your monthly income is between Rs 15,000 and Rs 20,000, you should consider a longer tenure loan. It will significantly reduce your EMI amount while eliminating the possibility of loan default.
 
Now that you have learned about the factors that influence loan disbursement, it’s time to learn about the loan disbursal process.