Personal loans have witnessed a steep rise in demand in the past few years and the biggest contributor to this rising popularity of personal loans are the simple documentation and easy eligibility. Because personal loans are unsecured loans, you do not need to submit any collateral. This saves you from the hassles of submitting tons of papers related to your asset. Thus, for a personal loan you just need to submit your personal KYC documents which include your ID proof, address proof, income proof and account details. However, these requirements can differ from lender to lender. However, with an online loan you just need to submit the digital copy of these documents.
Digital documentation makes it possible for you to apply the loan from anywhere at any time. This is one of the biggest benefits of the money loan appthat has transformed the world of financing.
Read on to understand why personal loans are considered one of the best financing tools by borrowers. Also mark the necessary documents that you must have handy on your phone to apply for an online loan.
Benefits of personal loans
A personal loan has many benefits for the borrower. Some of them are as follows.
- Collateral-free: A personal loan is unsecured loan which means it is collateral-free. You do not have to put your assets or property as mortgage against this loan. This considerably eases your documentation process.
- Hassle-free process: Availing a personal loan is a quick and easy process. There is minimal document requirement, and some lenders even offer the option of pre-approved loans.
- Multi-purpose loan: Personal loans have no restrictions on usage. You can use a personal loan for any purpose that you seem fit. Be it home renovation or extension, repairs, or purchasing high-end items.
- Flexibility: Lenders allow borrowers to choose flexible repayment tenure. That allows you to enjoy the benefits of the loan without putting a financial strain on yourself.
- Quick disbursal: The approval process of a personal loan through a money loan app is quick. The amount can be disbursed within 24 to 48 hours, if all your details are in place.
Documents required for a personal loan
The document requirement might differ from lender to lender. However, some of the basic requirements are as follows.
For salaried employees
- Duly filled loan application form
- One passport-size colored photograph
- Identity proof (any one)
- Passport
- PAN card
- Aadhar card
- Driving license
- Voter’s ID
- Proof of residence (any one)
- Passport
- Aadhar card
- Utility bills
- Driving license
- Ration card
- Proof of ownership of residence (any one)
- Property documents
- Electricity bills
- Maintenance bills
- Income proof
- Form 16 and salary slips for the last 3 months
- Bank statement for the last 6 months where salary is credited
- Proof of job continuity
- Employment certificate from present employer
- Experience certificate (Job certificate and letter of appointment or relieving letter from the previous employer)
- Appointment letter from present employer (if current employment is less than 2 years)
- Proof of investment
For self-employed individuals
- Duly filled loan application form
- One passport-size colored photograph
- Identity proof (any one)
- Passport
- PAN card
- Driving license
- Voter’s ID
- Proof of residence (any one)
- Passport
- Aadhar card
- Utility bills
- Driving license
- Ration card
- Proof of ownership of residence (any one)
- Property documents
- Electricity bills
- Maintenance bills
- Proof of office residence
- Maintenance bills
- Electricity bills
- Property documents
- Proof of business existence
- Copy of tax registration
- Registration license of the company
- Shop establishment proof
- Income proof
- Income tax returns of the past 2 years along with income computation
- Audit report, balance sheet, profit, and loss account
- Proof of investment (if any)
- Bank statements
- Past one-year statement of current account
- Past one-year statement of savings account
For NRI applicants
- Duly filled loan application
- One passport-size colored photograph
- Identity proof
- Copy of passport
- Copy of visa
- Employment proof
- Letter of appointment
- Job contract
- Identity or labor card
- Income proof
- Last 6 months’ NRO/NRE bank statements
- Last 6 months’ Salary slips
For pensioners
- Duly filled application form
- Passport size photograph
- Identity/age proof (any one)
- Ration card
- PAN card
- Driving license
- School leaving certificate
- Passport
- Voter’s ID
- Birth certificate
- Address proof (any one)
- Aadhar card
- Ration card
- Passport
- Utility bills
- Driving license
- Income proof (any one)
- Bank passbook
- Form 16
- Income tax returns
- Copy of pension payment order
- Last 6 months’ bank statement
Things you must bear in mind
- Always fill the loan application diligently, and cross check all the details including the spellings to the documents you are submitting. Many times, the loan application gets rejected because of a mismatch in the details.
- If you are opting for an online loan, then check the format of the documents requested by your lender. Always make sure to meet the lender’s requirements when submitting your documents.
- Always upload your latest picture in the loan application. Uploading a picture that’s older than six months, blurry or not according to the requested format can lead to loan rejection.
- Keep all your documents handy by uploading them on the cloud. This will help you apply for a loan when you need it without having to run for the papers.
- Always check your eligibility on the money loan app before applying for the loan.
Conclusion
Applying for a personal loan has become easier than ever with online loan apps and digitalization of the entire process. However, a personal loan is a financial commitment, a debt instrument and you must use it only after much consideration. Firstly, spare some time to think if you really need the loan. Secondly, think about your repayment plan and a back-up plan to your repayment plan in case of a financial crisis like job loss. Thirdly, always make sure to maintain a good credit score.