7 Ways to Reduce Personal Loan Processing Time in 2025

Are you tired of waiting days, sometimes weeks, to get your personal loan approved? You're not alone. Many salaried and self-employed Indians still face delays even after submitting all documents on time. Banks blame paperwork. 

Borrowers blame banks. But there are simple, actionable ways to reduce this waiting time.

Let’s break it all down. This is not just another list. This is a complete playbook.

Why Loan Delays Happen,  And Why You Must Fix It?

In May 2025, 67% of Indians reported taking a personal loan at least once, highlighting its importance in managing household finances.

Banks and NBFCs receive lakhs of personal loan applications every month. Outdated credit information, missing documents, or manual verifications often delay things for days. Add in holidays or server issues, and you’ve lost precious time. But here's the thing: 

Today, many fintech lenders disburse loans in just 30 minutes. So why are you still stuck waiting?

Speed is not just about tech. It's about understanding how loans are evaluated, knowing what lenders want to see, and avoiding common mistakes.

1. Shift to Digital First Lenders

Traditional banks still follow offline rules: verifying address, manually checking salary slips, and sending someone to your house. That’s why it drags.

But fintech lenders like KreditBee, CASHe, and Navi have changed the game. They use AI to read your salary slip, verify PAN and Aadhaar instantly, and check your credit with just one OTP.

What makes it faster?

• Paperless KYC
• Pre-integrated credit checks
• Salary or UPI link for instant income proof
• Smart risk scoring based on digital trails

Let’s say you apply for ₹1,00,000 for 1 year.
Here’s how the timeline compares:

2. Pick Pre-Approved Offers First

Don’t go apply randomly. If you’ve received an SMS or email from your bank or credit card saying you're pre-approved, go with that. Banks already have your income and repayment history. So they skip the major verification steps.

Why is this faster?

• Credit already checked
• Loan limit already set
• Income already verified

Let’s take an example:

Use that route if you work with a company that has tie-ups with private banks (like Infosys, TCS, HDFC). Employer verification gets you priority.

3. Clean Your Credit Profile Before Applying

This one matters more than most people realise. A poor credit score doesn’t just reduce chances ,  it slows things. If your CIBIL score is below 650, lenders will do extra checks. You might be asked to show more documents. Even if they approve, interest will shoot up.

Fix this first:

• Pay off credit card dues
• Don’t apply for 3–4 loans together
• Avoid bounced EMIs
• Keep credit utilisation <30%

Let’s see how this affects approval:

4. Lower Your FOIR and Increase Approval Odds

FOIR means Fixed Obligations to Income Ratio. It's how much of your income is already committed to EMIs. If it’s above 50%, most lenders hesitate.

Suppose your monthly salary is ₹50,000. You already pay ₹15,000 as a car loan and ₹5,000 as a credit card EMI. So FOIR = ₹20,000/₹50,000 = 40%. That’s okay. But if it hits 60%, the the loan might get delayed or rejected.

How to reduce FOIR:

• Close smaller loans first
• Don’t apply for credit cards just before applying
• Apply for joint loan with your spouse

Always calculate FOIR before applying. It’s the one ratio banks see first.

5. Avoid Making Multiple Loan Applications Together

Every time you apply for a loan, the lender checks your credit report. Too many checks at once? That’s a red flag. Lenders think you’re desperate or financially stressed. They put your application on hold for manual review.

Instead:

• Compare rates on aggregator sites (like Paisabazaar or BankBazaar)
• Then apply only once, with the best offer
• Wait 15 days between two loan applications

Spread out your applications. Let each get resolved before applying again.

6. Upload All Documents in One Go

Half the delays happen because people upload wrong or incomplete documents. A blurry Aadhaar, half-signed PAN, or old salary slip can stall the process.

Checklist:

• PAN and Aadhaar (front and back, clear)
• Salary slips (last 3 months)
• Bank statements (6 months, with bank stamp)
• Latest ITR if self-employed
• Address proof (only 1 needed)

Don’t mix scanned and photographed files. Keep one format (PDF or JPG). Rename them clearly like ‘Aadhaar_Front’, ‘SalarySlip_March2025’.

7. Apply During Working Days and Working Hours

It sounds silly, but timing matters. Many lenders process manually between 10 AM and 5 PM on weekdays. If you apply on Friday evening, your application will be held until Monday.

Apply Mon–Thu before 3 PM. You’ll likely get faster calls, faster email verifications, and quicker responses.

Also, avoid long weekends and bank holidays. Server loads go up. Human staff go on leave. Your file sits idle.

Conclusion

Speeding up your loan isn’t magic. It’s about playing smart. Use the right lenders, show the right documents, and avoid desperate actions like multiple applications. Even if you’re salaried or self-employed, ₹1,00,000 to ₹10,00,000 loans can get processed within 24 hours,  if you follow these.

Let banks wait for you, not the other way around.

FAQs

1: Can I get a personal loan without a credit score?
Yes, a few lenders offer loans to new-to-credit applicants. They use alternate data like salary slips, UPI transactions, or even social scoring. But interest is higher and limits are lower.

2: Is it safe to take instant loans from apps in India?
Only use RBI-registered NBFC partners. Check their names on the RBI’s website. Avoid apps that ask for unnecessary permissions or use foreign bank accounts.

3: How much salary is needed for a ₹2,00,000 loan?
If EMI is ₹9,000, you need at least ₹25,000–₹30,000 net income monthly. FOIR should be under 45% to be safe.

4: Can I get a loan if my company is not listed?
Yes, but banks may delay verification. In such cases, prefer fintech lenders who allow manual document upload rather than company database checks.

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?