The availability of personal financing has simplified funding for many people who could not afford other high-value loans. These are advances of decent ticket size, which makes them suitable to fulfil a range of financing needs of households, both large and small. In the current financial market, you can easily secure a personal advance of up to Rs.25 Lakh if you fulfil the necessary eligibility requirements set by your lending institution. Several other aspects like tenure flexibility, multiple repayment options, and easy EMIs make these loans popular among the borrowing class. Simplified personal loan documents required also make loan processing quick and convenient.
Below given are the essential things that you would need to know when availing the advance, including the eligibility and documentation. Let’s check them out.
Documents and Eligibility Criteria Required to Meet for Personal Loan
The easy accessibility of personal loans has made them popular financing options in today’s world. They are available to individuals meeting a few simple criteria only and fulfilling the required paperwork. Although unsecured, these loans involve quick processing timing and fast approvals, which mean availability of loan as and when needed, especially during emergencies.
You need to meet only a few eligibility and document requirements to avail the funding though. Below given is the list of personal documents required that you need to fulfil when applying for the loan.
- Identity documents: As a part of the KYC or Know Your Customer process, you need to provide your proof of identity so the lender has a record of it. KYC is a critical and mandatory process that you need to complete as per the RBI regulations of you are dealing with the lender for the first time and have not had any previous records of transactions with them. Under the proof of identity, you need to provide one or more of the specified documents that include the PAN card, voter ID card, Aadhaar card, Driving License, etc.
- Proof of address: Under the KYC process, you also need to provide a suitable proof of your current and/or permanent address. These documents are specified under the RBI guidelines, and include documents like the Aadhaar card, voter ID card, Passport, Driving License, Ration card, or any other valid proof of address. If you have already had transactions with the lender as a customer, the fulfilment of KYC requirements can be foregone.
- Documents related to occupation
Both salaried and self-employed individuals can apply for a personal loan. However, their varying occupations also require them to provide differing documents as a proof of occupational existence and vintage. Ideally, a salaried individual is required to provide the necessary documents related to their employment as a proof of their occupation along with a proof related to the years of work experience they have completed. The documents can include employee ID card issued by the employer, experience certificate issued by the employer, and such other eligible documents that the lender may ask for.
In the case of self-employed applicants, the documents needed can vary and primarily include business registration certificate, GST registration certificate, and such other documents as proof of business existence. To prove business continuation, the documents primarily include audited financial statements of the firm.
- Proof of income
The personal loan documents required as proof of income also vary remarkably for individuals applying as salaried and self-employed applicants. In the case of salaried individuals, salary slips for the specified number of months provided by the employer serve as a proof of income. Alternatively for self-employed personal loan applicants, their audited financial statements for the said number of years suitably serve as the proof of income. For both applicant types, bank statements and income tax returns filed for the said number of months and years respectively serve as proofs of income as well.
- Other personal loan documents required
Apart from these listed documents, the paperwork requirement for availing the advance can also include additional documents. These can vary from one lender to another. Hence, it is ideal to check with your lender first for the necessary personal loan documents required and arrange them beforehand to proceed with the application in a hassle-free manner.
As these documents serve as a proof of one’s eligibility, it is also ideal to know the common criteria and check if you meet them optimally before applying for the loan. The common eligibility criteria you need to fulfil to avail a personal loan include the following.
– Age of the applicant must be between the specified range as per the lender. The age requirements often vary with the applicants’ occupational engagement.
– Based on your city of residence, you must be earning income above a certain threshold, which usually ranges from Rs.15,000 and Rs.25,000.
– The individual’s credit score must not be less than 700 to avail unsecured advances like personal loans.
– You must be a residing Indian citizen with a residential stability of not less than 1 year.
– If salaried, you must hold a work experience of not less than 6 years in the current job, and a total experience of 1 year.
– In case you are a self-employed individual seeking the loan, you need to carry a minimum vintage of 1 year in the current business and a total experience of 3 years overall in running the business.
The lender may require you to meet additional eligibility criteria as well based on your borrowing profile. When applying for your loan, keep all the personal loan documents required ready for submission as and when needed to streamline loan processing and fast-track the approval.
When applying for the advance, it is also ideal to know the top features along with the personal loan documents required and eligibility criteria. Being well-informed about the loan features will help you choose the most reasonable and beneficial offer available from among different lending institutions in the market. Accordingly, you can proceed to apply for the advance either online or offline, although online applications are known to bring easier and fast-tracked loan approvals.