Before your term loan application is approved there are some steps to be followed. Nearly all of the term loan lenders who operate in India follow the same steps, so it is a good idea to educate you about them so that the approval of your term loan can proceed quickly. Here is the procedure
First, you should do a little research on what type of term loan you want to get. This way you will have an idea of how much you need to borrow as well as knowing if you can actually afford the loan.
Next, if you do some research on all of the lenders and loan products on the market you will be able to find one that suits your requirements.
The next step is to either apply for the term loan online, in person at your bank’s branch or over the phone. You will be required at this stage to provide term information about yourself.
Next step is to provide the bank with the required documents asked by them, make sure you provide no false information to them as to provide with false information may lead to you being declared fraud or even Blacklisted.
After that the bank will assess your company’s profitability, the bank will also evaluate your company’s status in the market.
After the assessment, when a bank is fully satisfied, the final step in the loan approval process is to actually sign and return the loan application form/format/letter to the finance company.
After this, your loan will be approved and the money will be transferred to your account.
Reasons for Rejection of Term Loan application
Reasons for a loan application to be rejected may be: –
Company has a bad credit history.
Company is classified as unstable.
Company’s current profit is insufficient to be able to make the loan repayments.
Company already has too many loans and its debt level are too high.
If the company has filed for bankruptcy before then you may not be approved.
Time taken for Term Loan Approval
You will find that in India approval of a term loan can take a few days. In some rare cases, you may even be able to get instant term loan approval. Actually, the time that it takes to get approval will depend on how complete the information that you provide is and whether or not that information places you in a high or low risk category. Generally, the lender will put the money into your loan account within a day or two after your term loan is approved and signed.