The Personal Loan Lifecycle
A personal loan generally follows a predictable path: you apply, the lender evaluates your eligibility, and if approved, funds are disbursed — typically as a lump sum — which you then repay through fixed monthly installments over an agreed tenure.
1. Application
You submit an application with details such as income, employment, existing obligations and the loan amount you need. Most lenders also require identity and income verification documents.
2. Eligibility Assessment
The lender reviews your credit score, income stability, existing debt and repayment history to assess how likely you are to repay the loan comfortably. This step also typically determines the interest rate offered to you.
3. Approval & Offer
If approved, you receive a loan offer specifying the amount, interest rate, tenure, EMI and any applicable fees. It is worth reviewing this offer carefully before accepting.
4. Disbursal
Once you accept the offer, the loan amount is disbursed, usually directly to your bank account.
5. Repayment
You repay the loan through EMIs — a fixed monthly payment that covers both principal and interest — over the agreed tenure. Missing payments can affect your credit score and may attract late fees.
A Quick Way to Estimate Your EMI
Before applying, you can estimate your likely monthly repayment using the RapidoFund EMI Calculator by entering the loan amount, expected interest rate and tenure.