How long does it take to get a personal loan from a bank?

Personal loans are generally taken by the persons who either do not have any tangible asset to offer as security or the ones who urgently need the cash to meet an emergency. In the majority of the cases, personal loans are taken by the people who are facing an emergency like situation and need the money urgently. So time is generally of significant importance in the case of personal loans. The time taken to get the personal loan processed depends on various factors like whether your application is made online or offline. It also depends on whether you have the existing relationship with the lender or not and host of other factors. Let discuss the factors which affect the time taken to process the personal loan application processed.



Mode of making application for a personal loan


Due to the aggressive adoption of technology by almost all the financial institutions be it a bank or a Non-Banking Finance Company (NBFC) application for personal loans can be made online. After making the application online you generally have to upload the documents in respect of your identity proof, address proof and income proof online. In some of the cases, you also have to submit these documents physically to the lender. So in case, the application is made and the documents are also submitted online the time taken to process the personal loan will be substantially lower than the time taken in case of physical offline applications. The time taken for processing of the personal loan can be divided into two parts. The first part is about the time is taken for approval of the personal loan which generally takes anything between 3 to 4 days in case of offline application. Once the approval is granted and the offer is accepted, the money generally gets credited in your bank account within the next two to four days. As against offline the time taken the online application comes down substantially to three to four hours for both the processes together if the documents are in order. In some of the case, it may also take up to three days even for online depending on the lender chosen by you.



An existing banking relationship with the lenders


In case you have an existing bank account with the lender where your salary is credited, the entire process till the amount of personal loan credited in your bank account may take as short a time as 10 seconds in case you are a pre-approved customer of HDFC bank. This has become possible due to extensive use of technology by HDFC bank and ready availability of all the details like basic Know Your Customer (KYC), due to salary getting credited to the bank account every month, the eligibility in terms of amount is already predetermined by the bank. In most of the cases if you are an existing customer you would already have received communication from HDFC bank about your preapproved personal loan eligibility. Even if you have not received any such communication, you can log in to your HDFC account and find whether you are amongst the pre-approved customer of the bank. In other cases where you have an existing bank account with the lender, which is applicable only in case the lender is a bank, the processing time is substantially reduced as your basic details of KYC are already available with the bank. The time taken to get the money credited in your bank account will be shorter if you apply online instead of offline. However, the time would normally vary between three days to seven days depending on who the lender is. As the private banks are more aggressive and focussed on the personal loan your personal loan application is likely to be processed faster by these banks as compared to public sector banks. Likewise, NBFC will generally take higher time than the banks due to convenience to transfer the funds directly through own channel.



Other factors


In addition to factor as to whether you are applying online or you have your existing banking relationship some other factors also affect the time taken to get the personal loan. Like the employer with whom you are presently are working will also affect the time taken to process the personal loan as some of the reputed companies top listed, public sector undertakings and major Multi National Companies are preapproved and thus the lender does not have to spend time on this aspect of due diligence. Your past history of transactions with the lender will also help the lender in processing your application quicker. So in case you have a credit card of a bank with a good limit, the bank will process your personal loan quicker. In case you have the good credit score and excellent credit history, you will get your personal loan processed faster than the others. The type of documents which you have for KYC compliance and in support of your income also have to bear on the time is taken to process your personal loan application. Instead of applying to a single lender I would advise you to apply online through third-party comparison portals where can do a comparative analysis. So the time taken to process your personal loan application will vary depending on whether you are making an online application and whether you have an existing relationship with the bank etc.