The moment you apply for a personal loan, it’s essential for a borrower to meet all obligatory eligibility criteria. It helps the borrower avoid potential rejection of the appealed personal loan. However, personal loan documents required to apply for the loan are one of the major components that a borrower should be concerned about. It includes the applicant’s KYC, income status, address proof, and more.
The documents help lenders distinguish the authenticity of the applicant. Additionally, it helps identify whether the applicant is a self-employed, NRI, or salaried person. However, the authenticity of your documents and proper paper submission will decide whether your application will get approved or rejected.
Concept of a Personal loan:
A personal loan is financing support provided by lenders to people who require instant cash. This loan does not require any security or collateral. Eventually, with minimal documents, you can avail of this loan effortlessly.
Furthermore, you can utilize the money availed from a private loan for multiple causes. However, you need to repay the entire principal loan value summed with an interest percentage within a fixed tenure like other loans. While signing the agreement, you have to agree with the lender’s terms and conditions and other policies. Customarily, the tenure period can be designed for a few months to a few years, accompanied by easy equated monthly instalments.
What can be a personal loan utilised for?
You are free to use the private loan sum for whatever grounds you wish. Yet, the purposes include:
- Higher education
- Medical treatment/ expense
- Hospital bills
- Home renovation
- Dream vacation
- Wedding preparation
- Purchase new gadgets, etc.
What are the papers I oblige to submit for a personal loan?
You have to keep ready some personal loan documents requiredfor the application process before anything. Your records will decide your qualification for a personal loan. Plus, these papers will help your lender determine the personal loan value you are eligible for.
However, various lenders may ask you for different documents. There are some basic papers every applicant requires to submit with the application form. Such as:
- Identity proof — Voter Card, PAN Card, Passport, Driving license, Aadhaar Card, etc.
- Address proof– Aadhaar Card, Passport, Driving license, Voter Card, Utility bill, Electricity bill, Telephone bill, Gas bill, etc.
- One passport-sized coloured photograph
- Resident ownership proof — Property documents, Utility bills, Electricity bills, Maintenance bills, etc.
- Existing loan documents (if any)
|Documents||Salaried individual||Self-employed individual||NRI||Prisoners|
|Income proof:||Pay-slips (last 3 months)
Bank statement (last 6 months)
|Current bank statement (last 6 months)
§ Investment proof
||§ Business papers as proof
||§ Copy of the Passport
§ Copy of the Visa
How does a personal loan act?
A personal loan acts the same way other loans work. Thankfully, it’s much efficient, convenient and easy to bear. So, if you submit authentic papers on time along with the application, you can avail of this loan without hassle. Also, the lender will verify your CIBIL/ Credit scores to check your worthiness for the loan. After that, they will offer the loan amount accordingly.
Afterwards, once you accept your lender’s terms and conditions and agree to take the loan, the lending company will transfer the amount directly to your bank account. Later, you can utilise the funds for any purpose.
Rationally, likewise every other loan policy, a personal loan comes with interest rates, which may differ based on the applicant’s profile. However, you need to pay off the loan amount through easy EMIs within the expected tenure. Besides, the EMI amount and tenure period may change depending on your documents and other factors.
When you decide to get a personal loan, it’s essential to make a list of personal loan documents required during the application process. However, your lender may or may not demand more documents since every lender has separate finance T&Cs for lending money. So, speak to your lender and prepare yourself before getting the loan.