Glossary · Finance & banking
Personal discussion (PD) in lending meaning
A personal discussion (PD) is a credit officer's structured meeting with a loan applicant to test income and business. See what a PD covers and its pitfalls.
Why do Indian lenders do a personal discussion?
Many borrowers in India, especially self-employed applicants, small traders and MSMEs, earn more than their documents show, or less. Cash sales, family businesses and informal suppliers do not always appear cleanly in ITRs and bank statements. A PD lets the credit officer see the business, hear the applicant explain it and test the numbers in person. The PD notes then become one section of the credit appraisal memo, and credit appraisal memo (CAM) software that cites every line to its source makes it clear which conclusions came from the PD and which from documents.
How is a PD different from field verification?
| Personal discussion (PD) | Field verification (FI) | |
|---|---|---|
| Who does it | Credit officer or underwriter | Field agent or verification agency |
| Purpose | Understand and test income, business and repayment capacity | Confirm address, existence of business, identity details |
| Output | Narrative assessment and estimated cash flows | Checklist, photos and location |
Some lenders run a telephonic PD for smaller tickets and an in-person PD above a threshold set by their credit policy.
What does a credit officer cover in a PD?
- How the business earns money, its customers, suppliers and seasonality
- Monthly sales, margins and how sales are received: cash, UPI or bank transfer
- Existing loans, including informal borrowing not on the bureau report
- Family members' role and any other income in the household
- What the loan is for and how the EMI will be paid
- Stock, machinery or premises the officer can see
How does a PD change a credit file? A worked example
Illustrative numbers only. A kirana store owner declares sales of ₹3 lakh a month. Bank statement credits average ₹2.4 lakh. In the PD the officer sees stock levels, a UPI QR code at the counter and supplier bills, and the owner says about a fifth of sales are in cash and deposited irregularly. The officer records the gap, the explanation and the evidence seen, and estimates sales between the two figures. The memo then shows both the banked and the assessed figure, so the committee can see the judgment being made.
What are the common mistakes in personal discussions?
- Treating the PD as a formality. A PD that only repeats the application form adds nothing.
- Leading questions. "Your sales are about three lakh, right?" invites agreement, not information.
- Opinion without evidence. "Business looks good" is not a finding. Record what was seen and how figures were estimated.
- Late write-ups. Notes written days later lose detail. Record them on the day.
For how PD and field reports fit together, see same-day field verification for loan files, and for where PD findings sit in the memo, read credit appraisal memo format.
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Where this shows up in our work. AutoCredit: Statements, GST, bureau and AA into one file; a memo against your policy bands; same-day field verification. Book a 30-minute working session with an engineer.
Questions
What is PD in a loan process?
PD stands for personal discussion. A credit officer meets or calls the applicant to understand their income, business, existing loans and loan purpose, and records the findings in the credit appraisal memo before a decision is made.
Is PD the same as field verification?
No. Field verification is usually done by an agent or agency to confirm address and business existence with photos and location. A PD is done by the credit officer to assess repayment capacity and test the applicant's figures.
How should I prepare for a personal discussion with a lender?
Be ready to explain how your business earns money, typical monthly sales, existing loans and why you need the loan. Keep recent bills, stock records and bank statements at hand to support what you say.