A personal loan is an unsecured loan taken by a person from a bank or NBFC, which is mostly preferred for financing your immediate needs. It is approved based on your credit history and your income. As it is a multi-purpose loan, there is no fixed time to apply for a personal loan. The loan is not secured against any asset; therefore, it does not require any collateral like gold or property. Taking a personal loan would be a decent instrument to source some funds. However, the Interest rate is generally higher than home and car loans.
There was a time when an application for personal loans used to get rejected because of its lengthy documentation process, but now with the help of digitization, approval of personal loans has become quicker and easier with minimum documentation. If you meet all the eligibility criteria and maintain a good credit score, then your loan disbursement can be processed within 72 hours.
Following are some of the important personal loan documents that you need for a personal loan application:
- Income proof- This means a detailed copy of the organization you are employed with or the company you own with the latest salary slip or copy of IT return needs to be submitted
- Bank statements- Thelast six months’ bank statement needs to be submitted. It generally varies from bank to bank. Some financial institutions may also ask you to submit the bank statement for the last three or five months
- Salary slip and Form 16– For self-employed, salary slip and form 16 needs to be submitted. Form 16 is a certificate of an employer which validates that TDS has been deducted and deposited quarterly with authorities of the company on behalf of employees
- Address Proof- You can submit a copy of your Ration card or Aadhaar card or passport or electricity bill or telephone bill or rental agreement as address proof
- Age proof- You need to submit documents, such as birth certificate, Aadhaar card, Voter Id card, PAN card, and other requirements for age verification
- Photo Identification Proof- For your ID proof you need to submit your Aadhaar card, voter id card, PAN card, passport, driving license and others
The requirement of documents varies for different individuals. Below is the list of documents required for salaried, self-employed and NRI applicants in detail.
Personal loan documents required for Salaried Applicants-
- Proof of Identity-Passport/driving license/Voter ID/PAN card (anyone)
- Proof of residence-Utility bill/Passport/Adhaar card
- Last 3 months salary slip and form 16
- Bank statements of 6 months
- Job continuity proof (if employed for less than two years)
- 2 passport size photographs
Personal loan documents required for Self-Employed Applicants-
- KYC documents: Address proof, Proof of identity, DOB proof
- Last one-year bank statement for both savings and current accounts
- Office ownership proof- Property documents/Maintenance bill
- ITR- Since self-employed does not have salary slips, they need to submit a copy of the latest IT returns with computation of the last two years’ income.
In addition to this, a copy of Certification Memorandum, Article of Association, Proprietorship Declaration or a copy of certified Partnership Deed is also necessary.
Personal loan documents required for NRI Applicants-
Not all banks offer personal loans to NRI’s,but some do, which are preceded only in two reasons that the applicant has to be an Indian resident and the co-applicant is NRI and both are close relatives. The following are some of the documents required for the NRI applicants:
- One passport size photograph
- Personal loan application duly filled
- One copy of passport
- One copy of Visa
- Last six months NRO/NRE bank statements
- Last six-months salary slip
- Proof of employment
These documents with the personal loan application and few photographs need to be submitted. Duly signed loan agreement copy will be sent as soon as the personal loan is sanctioned.