A Personal Loan can be the best bet for meeting a wide range of financial needs. Be it home renovation, higher education, wedding, medical emergency or debt consolidation, this financial instrument can be used for any purpose without any restriction.
If you’re considering taking out this unsecured loan, you’ll need to provide various documents to your lender to prove your eligibility and financial stability. Please note that each lender may have slightly different requirements, but in general, there are some common essential documents required for a Personal Loan that you’ll need to gather before applying for a Personal Loan. By familiarizing yourself with the types of documents you require, you can prepare for a seamless and smooth application process and increase your chances of loan approval.
In this article, we’ll discuss the list of all the documents you need to submit for this unsecured loan.
List of Documents Required for a Personal Loan for Salaried Individuals
To make your borrowing journey as smooth as possible, some of the top banks and Non-Banking Financial Companies (NBFCs) have minimal Personal Loan requirements. Hence, there is no lengthy paperwork involved. You just need to provide the following basic documents to apply for a Personal Loan:
- Proof of Identity: To apply for a Personal loan, you must provide a valid government-issued identification document. This could be your PAN card or Aadhar card. Your lender needs this information to verify your identity and ensure that you are legally eligible to apply for the loan.
- Proof of Address: You’ll need to provide proof of your current residential address to your lender. This could be in the form of a utility bill, rent agreement, or your passport that lists your address. Make sure the address is up-to-date and matches the information on your ID.
- Income Proof: Your lender will also need to see the proof of your income to determine your ability to repay the loan on time. This could be in the form of salary slips or bank statements. Make sure you have the required number of documents for the past 3 to 6 months to show consistent income.
- Employment Proof: If you’re a salaried individual, you’ll need to provide proof of your current employment status. This could be a letter from your employer stating your job title, employee ID card, employment status, and length of employment. The lender wants to know if you are a full-time, part-time, or temporary employee.
- Bank Statements: Bank statements show your spending and saving habits. Lenders will request bank statements from the past 6 to 12 months to verify your income and expenditure. Bank statements also provide information about your other financial commitments such as any existing loans, credit card debts, or mortgages. Lenders look for patterns of responsible spending and timely repayments.
So, these are some of the basic documents required for a Personal Loan. But keep in mind that lenders may also ask you to provide some additional information or documents at the time of loan application to know more about your identity and repayment behaviour. For example:
- Credit Score: Your credit score is a critical factor in determining your eligibility for a Personal Loan. You can get your credit score from any of the credit bureaus like CIBIL, Experian, or Equifax. If your credit score is high, it shows that you are responsible with credit and have a history of timely repayments. On the other hand, if your credit score is low, you may need to provide additional documents or collateral to secure the loan.
- Existing Loan Documents: If you have any existing loans, the lender may ask you to provide documents showing the terms of those loans. This could include the loan agreement, the repayment schedule, and the current balance. The lender wants to see if you have been making timely repayments on your existing loans and if you can manage to repay an additional loan. You can use document signing software if you required signature instantly.
Final Words
As you can see, the documents required for a Personal Loan are very basic and simple. Before you apply for a loan, make sure you keep all the required documents ready. Also, submit accurate details and papers so that the lender can process your loan application in the shortest possible time.
