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What are the Documents Required for Personal Loan?
Posted on Friday, April 21st, 2023 | By Indusind Bank
A personal loan is a type of loan that is typically unsecured, meaning it doesn’t require collateral such as a house or car. Instead, it’s based on your creditworthiness and ability to repay the loan. Personal loans can be used for a variety of purposes, such as paying off credit card debt, financing a home improvement project, or covering unexpected expenses.
The loan amount and terms (such as the interest rate and repayment period) are determined based on factors such as your credit score, income, and other financial information. It’s important to carefully consider the terms and conditions of a personal loan before applying and to make sure you can comfortably make the required payments.
If you’re considering taking a personal loan, you’ll need to provide certain documents to your lender to complete the application process. The specific documents required may vary depending on the lender, but here are some general documents that are commonly requested.
- Personal Identification Documents: To apply for a personal loan, you’ll need to provide personal identification documents, such as a passport, driver’s license, AADHAAR card, or voter ID card. This helps the lender to verify your identity and ensure that you’re eligible to apply for a loan.
- Proof of Income: When you apply for a personal loan, the lender will verify that you have a steady source of income to repay the loan. If you’re a salaried individual, you may be asked to provide your most recent salary slips or tax returns to demonstrate your income. If you’re self-employed, you may need to provide additional documentation, such as bank statements, profit and loss statements, or tax returns.
- Employment Verification: In addition to proof of income, lenders may also perform employment verification to confirm that you’re currently employed and to verify your job title and length of employment. This may involve providing contact information of your employer or providing a letter from your employer.
- Bank Statements: To help determine your ability to repay the loan, the lender may ask for your bank statement of last 3-6 months. This statement can help the lender to see how much money you have coming in and going out each month, providing a better understanding of your overall financial situation.
- Credit Report: Your lender will also want to review your credit report to evaluate your creditworthiness and determine the interest rate and terms of the loan. You can obtain a free copy of your credit report from any of the major credit bureaus.
- Loan Application Form: To apply for a personal loan, you’ll need to complete a loan application form. This form will ask for personal information such as your name, address, phone number, and information about the loan you’re applying for, such as the loan amount and repayment term.
- Other Supporting Documents: Depending on the lender and the type of loan you’re applying for, you may also need to provide additional supporting documents, such as proof of insurance, proof of residency, or information about your assets and liabilities.
It’s important to note that the specific documents required may vary depending on the lender and the type of loan you’re applying for. Some lenders may require additional documentation, while others may require less. Before applying for a personal loan, it’s a good idea to research different lenders and their requirements to ensure that you have all the necessary documents ready.
If you’re looking for a personal loan that is available instantly at best-in-class interest rates, do check out IndusInd Bank Personal Loan. Its application process is 100% paperless with low processing fees and attractive interest rates.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
