Getting a personal loan is easy, thanks to the numerous lending institutions, public and private, that have come forward to provide loans to their intended borrowers. The unsecured nature of the loan has encouraged an increasing number of people to apply for personal loans, be it for any reason, including:

1. making down payments for buying a property or a vehicle.
2. paying for home remodeling, higher education, vacation, an electronic gadget.
3. meeting medical expenses.
4. repaying credit card debt.
   
    other expenses
   

Minimal Documentation that Borrowers Must Provide:

Though a personal loan can be used for many purposes, many people inquire about the personal loan eligibility criteria and the documents that must be submitted along with the loan application. Most lenders advocate minimal documentation while applying for personal loans. Though not much is required of intended borrowers, lenders often seek personal loan documents depending on the borrower’s nature of employment. The important documents that customers need to submit while making their loan application include:

1. Proof of identity: Lenders need identity proof documents like a scanned copy of the passport, a copy of your Voter ID Card or your driving license. The numbers on your Aadhaar Card and PAN Card need to be uploaded to enable the lending institutions to verify the identity of their intended borrowers. Customers seeking pre-approved loans can simply use their Aadhaar numbers for the e-KYC process.

2. Proof of residence: A copy of your passport or Voter ID or Driving License or Aadhaar can serve as residential proof too. You cannot avail a loan without proving the authenticity and validity of your address. However, for those assenting to pre-approved loans, submitting this document may not be necessary as the lenders already have their records before offering this benefit to them.

3. Office proof address: You may seek a personal loan to enhance your business prospects too. If your company has applied for the personal loan or you wish the amount to be credited to your current account, you must submit documents showing proof of your office address or the registered address of your business enterprise.

4. Bank Statement (over the past three months): This is important as lenders wish to gauge your loan repayment ability. Your bank statement over the past three months contains details of the amount credited and debited over the period, thus, highlighting the regularity of cash inflow apart from showing the value of the estimated balance you have in your account. Those with a high frequency of cash transactions are more likely to get personal loans as opposed to those whose bank accounts are relatively dormant or if they struggle to maintain even the minimum balance in their savings or current accounts.

5. Salary Slips (over the past three months): A salary slip is proof of your income and that you are receiving a salary at the end of each month. Getting paid every month is proof that the borrowers have the requisite finances to repay their loans. Instead of their salary slips, borrowers may submit their recent salary certificates with the latest copies of Form 16.

The best part of applying for a personal loan is that you can apply for any loan amount depending on your requirements. However, credit score can have a determining effect on your loan interest rates, thus, necessitating borrowers to ensure a good credit history. The fact that you can easily repay your loan through equated monthly installments (EMIs) over a period adds to the affordable nature of the loan.

Article Posted By : Fullerton@123  On March 03, 2020lView All Articles

Hi, I am Rahul, a professional Financial Analyst. I have done MBA in Finance subject and worked in various finance organizations. I have work for past 6 years. I am a blogger and writes about finance and its updates. 

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personal loan , personal loan , documents