The Government of India introduced Aadhaar cards with a vision to provide all Indian citizens with a Unique Identification. Aadhaar card is a crucial document that is required to avail various services such as – the opening of a savings account, applying for PAN card, SIM card, or availing government subsidies.
Leveraging the applicability of this document, financing institutions are now also providing personal loan on Aadhaar cards, thus cutting down documentation to a minimum. Individuals availing the credit thus need to provide only their Aadhaar details and complete identity as well as address verification to avail the advance.
Steps to avail a personal loan with Aadhaar card
One can follow the steps given below to apply for a personal loan on Aadhaar Card online –
Step 1: Visit the official website of the lending institution.
Step 2: Go to the personal loan section and click on the tab marked ‘Apply Online’.
Step 3: Next, an online application form will appear wherein one should enter his/her personal, financial, and employment details.
Step 4: Borrowers can then enter their Aadhaar card number for E-KYC and provide the essential income proof for the online document verification process. They can also provide a copy of their Aadhaar card to a representative from a lending institution for offline documentation as per their convenience.
Several benefits accompany when opting to avail a personal loan with Aadhaar card. Some of these include –
- Applying for a personal loan on Aadhaar card reduces paperwork. It also reduces the costs involved in processing documents for the loan.
- Since financial institutions don’t need to spend significant time verifying the identity of applicants, it reduces the overall time for loan processing.
However, some lending institutions may also ask for other documents apart from an applicant’s Aadhaar details to confirm employment and income. These include –
- For salaried employees – An employee ID card, salary slips, bank account details, etc.
- For self-employed applicants – Income Tax Returns, proof of business’s existence.
Eligibility criteria
Applicants should, however, check the eligibility criteria specified by the lender before applying for a personal loan on Aadhaar card. The standard parameters that every applicant needs to meet are as follows –
- Applicants should be within the age range of 23 and 55 years.
- They must hold a credit score of above 750.
- They should be residing citizens of India.
- Applicants should also be employed with an MNC, public or private company.
- They should also meet the minimum income requirements according to their city of residence.
Additionally, some lending institutions like Bajaj Finserv also provide pre-approved offers to borrowers for hassle-free and quick loan processing. Such offers can be availed on several financial products, like business loans, personal loans, and credit cards. Individuals can quickly check their pre-approved offer by providing only essential details like their name and contact information.
While Aadhaar enrolment is mandatory for every Indian citizen, individuals not yet enrolled can proceed to check the following details to avail the card. Thus, apart from knowing about personal loans, individuals need to gain a comprehensive idea about Aadhaar application procedure too. It is a crucial document that serves as both proof of identity and address when availing a personal loan with Aadhaar card and otherwise.
Further, one should also consider the following aspects before applying for a personal loan on an Aadhaar card.
- Interest rates –
Personal loans are unsecured credits and can involve a high-interest rate if not selected after the required comparison. Therefore, borrowers must conduct thorough research regarding the personal loan interest rate offered by different lenders.
Plus, they should also know how to use a personal loan calculator, which will help them to assess the EMIs to opt for a suitable loan option.
- Associated fees –
Applicants should also check all the associated fees charged by the lending institution before opting for a personal loan on Aadhaar card. It is crucial to check the associated charges as these fees can increase the overall cost of the loan.
- Credit score –
A credit score is a numerical summarization of an individual’s credit history. Lenders refer to this score to gain an idea of one’s creditworthiness and assess his/her repayment capability. Consequently, a high credit score will suggest responsible credit behavior, whereas a low credit score means that an individual carries a history of default or late payment.
Since it is also one of the most crucial eligibility parameters based on which lenders sanction personal loan applications, one should focus on maintaining a high credit score. However, one should also know how to get a personal loan with a poor credit score to secure financing conveniently.
Personal loans come with several benefits. For instance, they offer flexibility in end-use and can be availed to meet a host of financing needs. Thus, while individuals should adopt a credit discipline to remain eligible, they must also adhere to other parameters to stay prepared for easy approval of the advance.