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personal loan

What are the documents required for a personal loan?

personal loan,required personal loan documents . 

Subhash who works as a computer engineer has a good monthly income with a great future lying ahead. He mostly commutes to the work by public transport and has to witness the everyday rush of people, all commuting to their offices during the peak hours. He observes his colleagues arriving on time as they could drive their vehicles to and from the workplace.

Subhash is now considering purchasing a bike but lacks sufficient funds. He does not know the process of obtaining a personal loan and thinks that the borrower needs to deposit so many documents and has to undergo many legal formalities.

This is a common case of people’s unwillingness to take a personal loan due to misconceptions that you have to present a number of documents to the lenders. If you want to get a personal loan, take a sigh of relief because it is actually much easier.

In this article, we will discuss what makes you eligible for a personal loan and what are the documents required for personal loans.

Documents required for a personal loan

During the times when you need funds urgently, you do not have to worry about the documents that the lender will ask you to show. The required personal loan documents are minimal as the lenders understand that no time can be wasted in allocating funds to you in emergency situations.

The lender will eventually generate interest income on the funds given to you as a loan but he needs to ensure that you are financially able to repay the loan amount. Most lenders would ask only for KYC and income proof documents before happily sanctioning you the funds. The documents that you need to get a personal loan can vary based on your employment status.

Given below is an extensive list of documents that you can provide to the lender, based on your work status- as a salaried person or a self-employed person.

Documents for salaried persons

  • Compulsory documents- You need to fill out the loan application form. The loan cannot be provided if you did not apply for it by filling out the application. Do not panic here as the form requires you to fill in only some basic details such as your personal information, ID details, and current income. You also need a passport-size photograph, which you will affix to a specific place in the form. While applying online you have to fill the same and upload your picture on the website or loan app.
  • Identity proof- You need to prove that it is you who is obtaining the loan and for that purpose one identity document is required. You can use any of the documents from the list below for identity proof-
  1. Aadhar card
  2. PAN card
  3. Driving license
  4. Passport
  • Residence proof- To provide evidence for your address the above-mentioned documents can be considered, provided that your home address should be mentioned on them. You can also use utility bills such as electricity or water bill and your ration card for resident proof.
  • Resident ownership proof- You would be needing any one of these documents if you are asked to submit a proof of the ownership of your home-
  1. Maintenance bill
  2. Electricity bill
  3. Property documents
  • Income proof- It is a necessary document that shows that you have a source of income and you are able to pay back the borrowed amount. You can show any of the following documents for this purpose-
  1. Salary slips for the last 6 months
  2. Bank statement for the last 6 months
  3. Form 16
  • Job continuity proof- The employer might also want to know if you currently secure the same job. In case you are not working anymore, there are chances that the lender can suffer losses due to non-payment by the borrower. The following documents can be considered-
  1. Appointment letter from the new employer
  2. Experience certificate from the last employer

Documents for self-employed persons

While most documents that are required for self-employed persons remain the same such as the application form, KYC documents, and income proof documents. Additionally, the self-employed can be asked to show the following documents by the lender-

  • Office address proof- The borrower needs to confirm that the place of work belongs to you, for which you can any of the below documents-
  1. Utility bill
  2. Maintenance bill
  3. Rent agreement
  4. Property documents
  • Business existence proof- In order to establish that your business indeed has a presence and it is not fictional, your lender can ask for these documents-
  1. Tax registration certificate (copy)
  2. Registration certificate of your company
  3. Shop registration certificate
  • Income proof- To prove that you generate an income that makes you eligible for the personal loan, you can show any of these-
  1. Last 6 months’ bank statements
  2. Last 2 years’ ITR

Summing it up

Subhash who was earlier dubious of the documents required to get a personal loan can get a loan easily by keeping these documents ready.

In fact, while applying for an instant personal loan for up to 2.5 lacs, many lenders ask you only for income proof and the KYC documents that have your address and personal information such as name and DOB. The PAN card is also required. The online process even gets you the loan approved within minutes. Having all this information, now you can easily apply for a personal loan.

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