Personal Loan Documentation Requirements:
To apply for a personal loan, an applicant must provide specific documentation to the lender, either in printed or digital form. The lender will request the following papers to verify the applicant’s identity:
- Identity includes a person’s name, age, gender, and physical appearance.
- Permanent and present residence (in case both are different)
- Employment status: Whether the applicant is a salaried employee or a sole proprietor.
- Income: The applicant’s monthly take-home pay.
- Loan Requirement: The loan’s purpose, duration, and amount.
When there is a cash deficit for any personal purpose, personal loans are lifesavers. However, lenders require a few documents from each applicant to ensure their own safety. Lenders each have their own set of requirements, criteria, and documentation.
The checklist of documents requested by personal loan lenders is shown above.
Employed Individuals Must Provide the Following Documents:
An employee is somebody who is employed by an institution and receives remuneration in the form of monthly salaries. Lenders demand paid individuals provide the following set of personal loan documentation.
- Valid Identification Document (any one of the following): Voter Identification Card / Passport / PAN Card /
- Driver License
- Proof of Address (any of the following): Ration Card / Passport / Utility Bill.
- Proof of Age (any of the following): Voter Identification Card / Passport / PAN Card / Driver’s License
- Income Verification: Salary Slips and Form 16 for the last three months.
- Job Security Current employment certificate or letter of appointment to a new job, as well as a certificate of experience.
- Bank Statement: The bank’s most recent six-month statement.
- 1 colour photograph the size of a passport.
- If you have any outstanding loans, you must produce a Payment Track Record and a letter of sanction.
- Completed Personal Loan Application Form.
Self Employed Professionals are required to submit the following documents:
Self-employed professionals and non-professionals applying for a personal loan must submit the following documentation.
- Valid Identification of the Applicant (any of the following): Voter Identification Card/Passport/PAN
- Card/Driving License
- Documentation of Residence (any of the following): Proof of Age (any of the following): Voter ID Card /
- Passport / PAN Card / Driving License Proof of Office Address: Property Documents / Maintenance Bills /
- Utility Bill Proof of Office Ownership: Property Documents / Maintenance Bill / Electricity Bill Three-year-old proof Salary Statement / Establishment of a Shop
- Income Documentation: The most recent two years of income tax returns, including computations.
- 1 colour photograph the size of a passport.
- Completed Personal Loan Application Form.
Related: 6 Things to Consider while Taking Loan from Bank
Documents Required for Non-Resident Indian (NRI) Applicants:
- 1 colour photograph the size of a passport.
- Completed Personal Loan application form.
- 1 passport duplicate.
- 1 visa in duplicate.
- NRO/NRE bank statement for the last six months.
- Six months ago Salary attestation or pay stub.
- Employment Verification.
- Personal loans are one way to obtain funds from reputable banks for any purpose. Additionally, an applicant must provide a specific set of documentation in order to be approved for a personal loan.
Why are these documents necessary?
These documents enable the lender (whether a bank or a non-bank financial company) to ascertain and comprehend the borrower’s financial soundness and conduct a credit risk analysis. Apart from that, it enables a lender to ascertain and verify the applicant’s personal information, such as age, income, address, employer, and employment. This is the criterion used by lenders to determine whether or not to lend to an application.
Because personal loans are unsecured, the lender does not require security to secure the loan, there is always a danger of the borrower defaulting or absconding with the funds. Thus, to be doubly certain, a lender will request a specific collection of documents in order to learn about and analyze the application before making a decision.
The documentation necessary for a personal loan assist the lender in determining and comprehending the following information about the applicant:
Identity Age Income Address Existing Loans History of Repayment (if any).
Once a lender gets these facts, he or she can have a greater sense of and understanding of the applicant. And, based on the information provided, they can make the applicant the finest loan offer possible.
As such, submitting all essential documentation when applying for a personal loan ensures that the applicant receives the best deal.
The checklist above includes all of the paperwork required for a personal loan.
