These documents help the bank assess your identity

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Are you wondering what documents you need for a personal loan? Here you will learn about the key documents required for a personal loan application in India

Are you wondering what documents you need for a personal loan? Here you will learn about the key documents required for a personal loan application in India

Introduction

Digital Desk: You can easily fulfil your dreams with the help of a personal loan. Even during emergencies and sudden events, a personal loan can be of great help to you. However, to avail of this personal loan, you need to submit a certain set of documents.

These documents help the bank assess your identity, address, and creditworthiness. Before applying for a personal loan, you should keep the required documents ready. So that the loan application process becomes easy and smooth. In this blog, we will get to know about the documents required for a personal loan.

Why Documents are Important for a Personal Loan Application

Documents play an important role in the personal loan application process. This is because personal loans are an unsecured product. Hence, financial institutions have to heavily rely on paperwork to assess the credibility and repayment calibre of borrowers. Here are why documents matter: -

1. Identity Verification

Fraudulent activities have increased these days. Hence, lenders want to verify your identity and ensure that you are not a fraud. This ensures that the loan application goes smoothly.

2. Address verification

Address verification helps lenders to know where you live. Hence, any communication related to a loan can be done at this address.

3. Financial Assessment

Lenders want to check whether you are financially capable of paying the loan EMIs or not. For this, they ask for salary slips, ITR, or bank statements.

4. Employment Check

Your income and job stability determine your repayment capacity. It ensures that you will have a regular inflow of income through which you will pay off the loan instalments.

5. Age and Eligibility Confirmation

Your age has to be within the eligibility criteria. If not, then your personal loan can’t be approved.

6. Faster Loan Processing

Timely submission of correct and complete loan documents makes the loan processing faster.

What are the Documents Required for a Personal Loan?

Now, let’s come to the main matter – which documents are needed for a Personal loan? Here are the main documents required for a personal loan application: -

1. Proof of Identity

You will have to provide government-issued identity proof to verify your identity. This can be one of the following: -

● Passport

● Pan Card

● Driving License

● Voter’s ID

2. Residence Proof

Lenders want to make sure where you live. So that any communication related to the loan can be circulated to you. Moreover, if you make any default in payment, then they can collect the payment from this address. The following documents are accepted as Residence proof: -

● Aadhar Card

● Passport

● Ration Card

● Utility Bill

3. Proof of Income

Lenders would want to check whether you can pay off the personal loan or not. For this, they ask for proof of income. The following documents are valid as proof of income: -

● Last 3 months’ salary slips

● Income Tax Returns

● Bank Statements

4. Employment Verification

If you are a salaried employee, then you need to provide employee verification. This can be a Letter from your employer or recent bank statements.

5. Passport Size Photographs

You are required to submit two passport-sized photographs for the personal loan application process.

6. Bank Statements

Financial institutions want to check your financial stability while sanctioning a loan. Hence, they ask for a bank statement. It determines how good you are at managing your finances. You are required to submit 6 6-month bank statements.

Conclusion

The personal loan application process is very simple. But the documents matter a lot, which decides your loan approval. Personal loans are unsecured, hence lenders verify your loan based on the documents.

You shall be prepared with all documents before you apply for a personal loan . Majorly, you will be required to produce identity proof, address proof, income proof, employment proof, and bank statements.

If the loan documents are completed and correct, then you have better personal loan approval chances. Hence, collecting the documents and submitting them on the right time is the first important step in your personal loan journey.

Frequently Asked Questions

1. Do I have to submit original KYC documents?

No, you don’t have to submit the original KYC documents. You can submit photocopies of the KYC documents.

2. What are the alternative documents that can be submitted instead of salary slips?

If your employer doesn’t provide salary slips, then in that case you can submit bank statements. It shall reflect the entry of salary credited to your bank account. You can also submit Income Tax returns as proof an income.

3. How do I check my personal loan eligibility?

You can use loan personal loan eligibility calculator to check if you are eligible for a loan or not. You shall apply for a personal loan only if you meet the eligibility requirements.