Gone are the days when personal loans used to be the last resort of people in times of monetary crisis. With the express services being offered by the banks, people have switched to personal loans over other loans. However, you need to do a little homework that will help process your loan in time. Wondering what it is? Well, to stay application ready, you need all your personal loan documents in place. Read on to know more…
What is a Personal Loan?
Often used to overcome a financial emergency, a Personal Loan is money borrowed from the bank with an appointed repayment period and routine monthly payment. It typically ranges between $1000 to $50,000, with interest rates varying between 3 to 36 percent. Moreover, the no-collateral system of an unsecured personal loan makes it all the more appealing to borrowers. According to a web publication released by RBI, personal loans recorded double-digit growth over the last decade.
Important Points Before Applying for a Personal Loan
Personal Loans are a convenient way of getting additional funds but here are a few things you need to take care of before you jump into the application process.
- Credit Score: Being one of the most important eligibility criteria, Credit Score is an indicator of the risk and likelihood of your loan repayment. The higher the credit score, the higher the chances of getting your loan approved. So, make sure you check whether your current credit score complies with the required score released by the bank.
- Payment History: This is a subset of your overall credit score and indicates your sincerity while making payments for previous loans. It takes up 35% of the FICO Score, which is another important credit scoring system. If you have a smooth payment history, no one can stop you from getting your Personal Loan approved in time.
- Trustworthy Loan Provider: No one likes to get scammed when it comes to getting loans. So, you must be vigilant while opting for the right loan provider. You can either choose to go with a bank or look for reputed finance companies that provide Personal Loans in Gurgaon.
Required Documents to Get Your Loan Approved
Expecting an express loan procedure from the bank requires an equally express get-up-and-go spirit from your side. While most lenders require similar documents, some may ask for additional documents depending on the eligibility criteria. Here’s an A-Z checklist of the personal loan documents that are required for the application:
- Identity & Age Proof: You cannot deny the importance of this one piece of paper. The identity proof should necessarily be government issued and warrant your actual age in years. A few acceptable identity proofs are:
- AADHAR Card
- Driving License
- Voter ID
Tip: Keep at least two of your identity cards ready to be on the safer side and two passport-sized photographs.
- Signature Proof: Another not-to-be-missed part of your documents application checklist, a signature proof must validate the hand signature unique to you. Here’s what can be used for the same:
- PAN Card
- Address Proof: Following the residency laws, you must present proof of your physical address. Apart from the authorized documents like Passport and AADHAR, you might need one of the following as well:
- Utility Bills like gas or electricity
- Ration card
- Lease or Rental Agreement
- Income Proof: Getting a personal loan without sharing your income details? No, not even in your wildest dreams. Whether you are self-employed or salaried, you must present proof of your income in all cases. Here are some documents that serve the purpose:
- Bank statements for the past 6 months
- Salary slips from the past 3 months
- Income Tax Returns or Form 16
- Other occupation-related proofs: If you run a business, then below are the additional documents that you must submit:
- Business Proof- Registration certificate, license, GST number
- Balance Sheet plus Income computation of last 2 years
- IT Assessment
- Income Tax Challans
Getting loans approved may be a little exhausting but with most of the application systems moving online, it could ease your part. However, you must keep the required personal loan documents handy to avoid any sort of late processing. So, what are you waiting for? Get, Set, Apply!