With 2022 ending, financial crunches are something everyone deals with, but only some have the money to spend on things. Fortunately, there are plenty of ways to cover your needs financially. You can use a personal loan as an alternative to credit card usage, as you have the necessary documents required to get the personal loan. Whether you’re self-employed, a business owner with a loan from the government, or a first-time borrower, personal loans can help you get the situation under control. With a personal loan, you do not have to manage your money and spend it yourself. When used responsibly, personal loans are a great way to control your financial future and improve your credit. They are also great for struggling borrowers who need help getting their credit back on track.
Although personal loans are a great option to cover financial emergencies, keeping relevant personal loan documents such as form 16, PAN card, AADHAR card, and other such KYC (Know Your Customer) documents ready is essential. So read this blog till the end to learn more about personal loans and the documents required for personal loans.
Documents required for a personal loan – Salaried and Self-Employed
The following are the most common documents required for personal loan online approval for salaried and self-employed individuals:
List of Personal Loan Documents for Salaried Employees
|Proof of photo identity (Any one)||
|Proof of Residence (Any one)||
|Proof of Ownership of Residence (Any one)||
|Proof of Income||
|Proof of Job Continuity (Any one)||
|Proof of Investment (if any)||Fixed assets, shares, fixed deposits, etc.|
|Photograph||One passport-size color photograph|
List of Documents Required for Self-Employed Individuals
|Proof of photo identity (Any one)||
|Proof of Residence (Any one)||
|Proof of Residence Ownership (Any one)||
|Proof of Office Address (Any one)||
|Proof of Office Ownership (Any one)||
|Proof of Business Existence (Any one)||
|Proof of Income||Income tax returns for the previous two years inclusive of Computation of Income, audit report, balance sheet, profit and loss account, etc.|
|Bank statement||Savings and current bank statement for the past one year|
|Proof of Investment (if any)||Investments such as fixed assets, fixed deposits, and shares|
|Photograph||One passport size color photograph|
Aadhar Card For A Personal Loan
Importance of Aadhar Card:
- It acts as the main identity for every Indian citizen.
- You can use it as your address, identity, and age proof.
- It helps avail of Government schemes and services.
- You can apply for an Aadhar Loan.
Why Is an Aadhar Card Mandatory For a Personal Loan?
AADHAR card is one among the many documents required for a personal loan. Classified as one of the KYC (Know Your Customer) documents, the Aadhar card can substitute for other documents like PAN cards, Voters’ IDs, ration cards, passports, etc. You can also avail loan just on the aadhar card.
Read More: Loan on Aadhaar Card for Medical Emergency
Form 16 For A Personal Loan
In most cases, Form 16 is required for a person, whether employed or self-employed, with an annual income of over Rs. 2,50000. You can avail the best benefits with your current credit score. Form 16 encloses the details of the tax paid. Companies use this form to inform their employees about tax deducted at source and delivered to the government. Therefore, Form 16 is also called a TDS (Tax Deducted at Source) certificate. There are two parts to Form 16. Part A encloses employer information and employee information. Part B encloses income earned, deductions made, tax payable, etc. For the best information on personal loans, check this article.
PAN Card For A Personal Loan
A PAN Card is not mandatory if the person has other supporting documents required for a personal loan, such as an Aadhar card, ration card, Voter ID, and Passport. However, it is unusual for someone not have not to have a PAN card! . Hence, it is always advisable to get a PAN card at the earliest as some banks mandatorily ask for a PAN card. Moreover, a PAN card is essential to be viable and recognizable within the Indian banking and financial system as a responsible tax-paying citizen.
Individuals with an annual income exceeding Rs. 2,50,000 must have a PAN card. It is assumed that anyone without a PAN card has an income less than that. It means that this person is exempt from filing an income tax return. Most banks will not entertain such applicants when they apply for a business loan, car loan, or any other loan if their loan eligibility falls below the benchmark.
Uses of a PAN card
- Filing income tax returns: With a PAN card, this can be done.
- Bank account opening: PAN card is mandatory. Even during a housing loan eligibility check, furnishing the PAN card is required.
- Purchasing or selling a vehicle: To apply for a vehicle loan, providing a PAN card is mandated by most banks. So to apply for a car loan online, consider getting a PAN card first. Don’t lose out on personal car loans with attractive interest rates for want of a PAN card.
- Purchase of precious items/jewels: Sometimes, purchasing gold or special items can be an investment. A gold loan applied online procedure requires furnishing a PAN card. Gold loan providers need these details. Best gold loan offers at nominal interest rates can be obtained.
- Pan Card Loan: You can avail of a Pan Card Loan just by submitting your PAN card and income proof.
Features of the Personal Loan
- Flexibility: You can use a personal loan for several purposes, for instance, personal loans for travel, education, private expenditure, business financing, wedding expenses, etc. Having complete freedom of money expenditure makes personal loans a sought-after loan finance vehicle, unlike traditional loan products.
- Collateral Free: Personal loans are unsecured, meaning you need not submit any collateral when applying for one. It reduces the time taken for verification and simplifies the loan application process. For example, a home loan would require a plan sanction letter, sale deeds, a letter of consent from regulatory authorities, and so on. Obtaining and getting these documents takes time. Hence you can go for a personal loan and save yourself a lot of time.
Also Read: Get Personal Loans Without Any Income Proof
Quick loan disbursement:
Being specially structured and under flexible loan disbursement policies, personal loan disbursal is faster than traditional bank loans. The average disbursement period is 24 to 48 hours maximum. And applicants can know the status of the loan within 24 hours. If approved, they can receive the money instantly.
Suitable for all income groups:
People from all income groups can opt for gold loans, low-interest car loans, or any personal loan, thus creating an economic ecosystem of liquidity, stability, and inertia. Without this, the economy would be stagnant, cash flow would be scarce, and all economic activities would slow down due to a lack of liquid cash. But now, nobody will fall into a debt trap or wait for cash flow to start their activities. Thanks to the broad range of personal loans available for all income groups.
Flexible Loan Tenures:
You can borrow up to Rs.15 Lakhs and choose the repayment tenure from 12 to 60 months per your requirements.
No Hidden Charges:
Lenders will not include prepayment or hidden charges when providing a personal loan.
Safety Of Your Loan:
By law, the borrower’s information is confidential from any other party apart from the lender. Hence, all the information and documents you share are safe and secure within the financial institution.
Right Time To Get A Personal Loan
Personal loans are a necessity in a variety of scenarios. Here are a few circumstances where you can use a personal loan.
For Flexible Usage:
Unlike a mortgage loan that can only be used for building a home, a personal loan can be used to buy a bike, home, jewelry, travel, and lots more.
To Improve credit:
The virtue of getting a personal loan itself improves one’s financial standing with the credit bureaus like CIBIL and Experian. Many banks and non-banking financial institutions give personal loans. Hence, lenders have varying lending criteria. Some would want a higher credit score, and some could do with a nominal or average credit score. So getting a personal loan and then making regular repayments on the appointed date can dramatically increase one’s creditworthiness.
For Debt consolidation:
A personal loan for everyone – running into credit card debt is not a myth – many people have been affected by it. Having multiple credit cards without managing them can lead to outstanding balances in all of them. The same applies to loans too. But thanks to personal loans, provide the liberty to consolidate all the debts into a single personal loan. This not only improves credit ratings but also helps the borrower focus on repaying one single loan. Thus, improving their efficiency in managing their finances and saving valuable time and effort.
Also Read: Personal Loan For Proprietorship Company Employees
The Versatility Of Personal Loan
Personal loans are versatile and can be used for anything. Lenders offer the types of Personal loans to cover your financial needs.
Personal Loans To Finance A Wedding
Weddings in India are expensive compared to other countries. There are better choices than a wedding budget that costs all your savings. Hence, you can ease this problem with a personal loan for a wedding and have the marriage of your dreams. Moreover, you can apply for this loan for the would-be bride/bridegroom or a family member. And you can take a loan amount of up to ₹25 Lakhs. The repayment tenure for this loan is between 12 months to 5 years.
Personal Loan To Get A Home Improvement.
Your old house may need repairs, but the costs of renovating often hinder people from doing so. Fortunately, an instant personal loan can help you cover expenses such as remodeling your kitchen and increasing your house’s durability and comfort. You can also increase its market value. The repayment tenure for a home renovation loan can go up to 5 years. Hence taking a Home Improvement Loan or a personal loan for the home renovation can help you fulfill all your needs.
Personal Loan To Finance Your Travel/Vacation.
A personal loan is a smart option when you plan a vacation and want to pay your travel expenses without affecting your monthly budget. Although credit cards can fulfill your needs, an instant personal loan for travel (holiday loan) can make your travel plans more accessible and at a lower interest rate. The main benefit is that the application process is simple and you can get your loan instantly approved.
Top-Up Personal Loan
Lenders offer top-up loans to customers who have already taken out a loan. In a top-up loan, you must repay it within the current term to borrow a certain amount of money over your existing loan.
Personal Loan For Consumer Durables
You can get an instant personal loan to purchase phones, refrigerators, furniture, washing machines, microwaves, etc. An amount of the product can be repaid through EMIs over a specified period. In some cases, there may be down payments or processing fees, while in others, there may not.
Personal Loan for Higher Education
Many lenders offer personal loans to help you finance your higher education, and they are mostly unsecured. You can use a personal loan to pay your tuition fee residence fee and use it for any other academic purpose. This loan can help cover expenses related to your education, and you can avail max loan amount of up to ₹20 Lakhs. The loan repayment tenure can go up to 5 years.
Personal Loan for Business
It takes a lot of financial resources to sustain your business in a competitive market. It would be best if you were updated with current demands and needs, which require considerable capital. In such situations, you can get a personal loan to finance your business requirements, such as expanding your business, increasing your production capacity, or even launching a new business. You can get a max loan amount of up to Rs.20 lakhs, and the loan repayment period starts from 12 months to 5 years.
Personal Loan For Festival
Festival celebrations often come with huge expenses you have yet to plan. So, celebrate your festival without worrying about costs by getting a small personal loan. Many banks will offer you a personal loan for celebrations up to Rs.50,000.
Personal Loan For Medical Emergency
Medical emergencies come without forewarning, and medical treatment costs are relatively high. In such situations, a personal loan for a medical emergency can be a lifesaver. Depending on your eligibility, you can quickly get a personal loan for medical emergencies up to ₹ 25 lakhs for a tenure of up to 5 years.
Personal Loan For Agriculture
Lenders offer personal loans to farmers to meet expenses related to farming and agricultural activities. These loans are usually provided at a comparatively lower interest rate and have a flexible repayment loan tenure of up to 5 to 6 years.
Personal Loan For Debt Consolidation
You can avail of a personal loan at a lower interest rate to clear your past debts, which have higher rates. For example, a credit card usually has an interest rate of 40% to 45% p.a., Whereas a personal loan starts with an interest rate of 11.99%. Hence you can use a personal loan to clear your credit card debts at once effortlessly. Many banks offer you a personal loan of up to ₹25 Lakhs for debt consolidation.
Personal Loan Eligibility Criteria
The eligibility criteria vary from bank to bank for a personal loan. For salaried and self-employed individuals, you must satisfy the following criteria to be qualified for the online loan process:
- You must be a citizen of India.
- Your age must be between 18 to 60 years.
- A minimum of two years of employment with your present organization is required for salary purposes.
- Monthly income must be a minimum of Rs.15,000
- If you are self-employed, you should have a minimum of two to three years in the profession/business you have now.
- You should have a credit score of at least 750.
Personal loans are emergency wealth. It is easy, and quick and also assists in increasing your credit score by giving you several repayment options. But even before you start to enquire about the latest interest rates or process fees for loan approval, get the documents required for a personal loan ready.
You can choose a personal loan using aggregating platforms like Buddy Loan as it helps you get personal loans at affordable interest rates without the hassle. For more information, visit the official website or download the Buddy Loan App and get yourself covered during any financial crisis.