Everything a loan agent must know - EMI formulas, CIBIL facts, loan stages, processing fees, and answers to questions your customers will ask.
Understand the math behind EMI so you can explain it to your customers confidently.
Common loan scenarios for quick reference
| Loan Amount | Interest | Tenure | EMI | Total Interest |
|---|---|---|---|---|
| ₹500,000 | 12% | 36 months | ₹16,607 | ₹97,852 |
| ₹500,000 | 12% | 60 months | ₹11,122 | ₹167,320 |
| ₹1,000,000 | 10% | 60 months | ₹21,247 | ₹274,820 |
| ₹1,000,000 | 10% | 120 months | ₹13,215 | ₹585,800 |
| ₹2,500,000 | 8.5% | 240 months | ₹21,679 | ₹2,702,960 |
Higher tenure = Lower EMI but MORE total interest. Help customers understand this trade-off. A 5-year personal loan costs almost double in interest compared to 3-year tenure.
From application to disbursement - understand every stage so you can update your customers accurately.
Customer shows interest in loan. Basic details collected.
Starting PointFormal application submitted with documents.
Documents SubmittedBank does initial check. CIBIL verified. Tentative approval given.
Preliminary YesDetailed verification of income, documents, and eligibility.
Deep VerificationBank officially approves the loan. Sanction letter issued.
Official ApprovalMoney transferred to customer account. Loan is now active.
Money ReceivedSoft Approval (In-Principle Approval) means the bank has done initial verification and is tentatively willing to give the loan. However, it's NOT final. Final approval comes only after complete document verification and underwriting.
⚠️ Don't tell customers "loan is approved" at soft approval stage. It can still be rejected.
Disbursement is when the bank actually transfers the loan money to the customer's account. This is the final stage. Only after disbursement:
Customers always ask about processing fees. Here's everything you need to explain.
A one-time fee charged by banks to process your loan application. Covers verification, documentation, and administrative costs.
Typically 1% to 3% of loan amount. Some banks have minimum (₹2,000) and maximum (₹25,000) caps.
Generally NO. Once paid, processing fee is non-refundable even if loan is rejected or you cancel.
Sometimes YES. During festive offers or for good CIBIL customers, banks may reduce or waive PF.
Usually deducted from loan amount at disbursement, or paid upfront before processing.
| Loan Type | Processing Fee | Example (₹10L Loan) |
|---|---|---|
| Personal Loan | 1% - 3% | ₹10,000 - ₹30,000 |
| Business Loan | 1.5% - 3% | ₹15,000 - ₹30,000 |
| Home Loan | 0.25% - 1% | ₹2,500 - ₹10,000 |
| Car Loan | 0.5% - 1% | ₹5,000 - ₹10,000 |
| Loan Against Property | 0.5% - 1.5% | ₹5,000 - ₹15,000 |
Customers believe many myths about CIBIL. Know the facts so you can guide them correctly.
FALSE. No one can directly edit your CIBIL score. It's calculated automatically based on your credit behavior reported by banks.
FALSE. Self-checking is a "soft inquiry" and does NOT affect your score. You can check unlimited times.
PARTIALLY TRUE. Multiple "hard inquiries" (when banks check for loan) within short time can reduce score by 5-10 points temporarily.
OFTEN FALSE. Old cards with good history actually help your score. Closing them can reduce credit history length.
FALSE. CIBIL is checked for credit cards, some job applications, rental agreements, and even insurance.
FALSE. With consistent good behavior, CIBIL improves over time. Negative items are removed after 7 years.
If anyone claims they can "increase your CIBIL score" or "remove negative entries" by taking payment — IT'S A SCAM. CIBIL scores are calculated automatically by the system based on your credit behavior reported by banks. No third party can directly edit it.
The only legitimate ways to improve CIBIL: Pay dues on time, reduce credit utilization, maintain old accounts, and dispute genuine errors through official CIBIL dispute process.
Help your customers understand what improves and what damages their credit score.
Know these terms to speak confidently with customers and bank representatives.
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