Last Updated on February 28, 2023 by Ahmed Aftab
In emergencies, you want a quick loan that is hassle-free and requires a minimum waiting time. The solution is taking a personal loan.
But what’s a personal loan? It is an unsecured loan given by financial institutions like banks and NBFCs to meet your urgent financial requirements. Online lenders have become popular in dispensing personal loans with the quick disbursal of money, lower interest rates, and minimum documentation.
The best part is it is not necessary to specify the reason for taking a personal loan, and hence it serves as a multi-purpose loan.
You can take a personal loan using the Aadhar card because an Aadhar card is valid identity proof and address proof. You get an instant loan using Aadhar, and the verification process becomes easy because an Aadhar is linked to your biometric system and fulfills a KYC procedure.
The article intends to enlighten you on the benefits of taking a personal loan with an Aadhar and the step-by-step guide to applying for a personal loan. So, without further ado, let’s get started.
Advantages of taking a personal loan using the Aadhar card
India has evolved from the multiple document verification process to a single identification number to obtain financial services and government benefits.
With the world leaning towards a flexible and easier way to make transactions, financial institutions have reduced the waiting time and documentation procedure.
In 2010, the Aadhar card was introduced, paving the way for a centralized system in India. An Aadhar card is a 12-digit unique identification number containing biometric details like iris and fingerprint scan. It can minimize the otherwise lengthy procedure to obtain loans.
The following are the benefits of taking a personal loan using an Aadhar card-
Single card for identity and address proof:
A personal loan requires identity and address proof. Since an Aadhar number is linked to your biometric, it will ease the procedure of identity verification, age, date of birth, and hence you will get an instant personal loan.
Serves as a KYC document:
Banks and NBFCs require every customer to complete a KYC procedure to prevent money laundering and identity theft. An Aadhar card is a unique number, and hence it is a valid KYC document. With this, loan approval becomes even quicker.
Takes less time:
The main feature of using an Aadhar card for a personal loan is the reduced time. Since it supports two prominent documents(identity and address proof), you can avail of a personal loan within no time. Online fintech such as Money view gives an instant Aadhar card personal loan within 24 hours.
Does not require any collateral:
The personal loan using an Aadhar card does not require you to put up collateral, thereby allowing you to apply for the loan when you cannot provide security for the amount you have taken for the loan.
Loan Eligibility Criteria
A personal loan comes in handy during unprecedented situations. So, it has minimum eligibility criteria.
- Must be an Indian citizen.
- Should be of the age between 21 to 67 years.
- Should have an Aadhar card and complete KYC documentation.
- Should have a decent CIBIL score (Above 600).
- Should be employed or have a stable income.
Taking a personal loan using an Aadhar card requires minimum documents. Since banks and NBFCs have the option of authenticating KYC online, an Aadhar card becomes a savior since the online database has your details and can quickly get the loans.
It is a common misconception that for a personal loan using an Aadhar card, you require no other documents but for the Aadhar card. It is not the case. Lenders require other documents for income proof.
Here are the documents required for a personal loan using an Aadhar card.
Documents Required for Salaried Applicants:
1. Identity proof:
Documents such as Voter ID and Aadhar Card.
2. Address proof:
An Aadhar card, utility bills, or
3. Income proof:
Salary slip of the past three months, ITR returns of the last two years.
4. Bank Statement of the past three months.
Documents Required for Self-employed Applicants:
You require the same documents as that of salaried applicants, but for income proof, as a self-employed, you must submit the bank statements of the past three months, balance sheet, and business license.
However, the income proof differs from lender to lender. Online Fintech has a more flexible application process and requires fewer documents than banks and NBFCs.
Loan Application process
You can take a personal loan using an Aadhar card by visiting any nearby bank or NBFCs. The application process is simple. You have to apply for the loan with the necessary documents ready. Online application is convenient since you can send a soft copy of the required documents and KYC details online.
Let’s look into the step-by-step procedure of application.
First, calculate the amount of money you require. Depending on it, research which lender to approach for the loan. Once you choose the lender, check for the eligibility criteria.
You have to enter the loan amount you want and the repayment tenure. Depending on these, you can check whether you are eligible for the loan. After you meet the eligibility criteria, apply for a personal loan.
Submit the soft copy of your Aadhar card and other supporting documents like income proof.
After finishing the application process, your loan will be approved within 24-72 hours. The Aadhar card makes the verification process easy, and hence you get the loan amount in your bank account within a flash of time.
Today, people choose comfort and ease over an elaborative method of obtaining a personal loan. With online NBFCs like Money view, you can get an instant loan with minimum hassle and affordable interest rates.
Interest Rate and Repayment Tenure
A personal loan using an Aadhar card is notable in many ways. It will make the process simple, fast, and with few procedures. The main features of a personal loan using an Aadhar card are:
- Most of the banks and NBFCs offer a personal loan up to INR 35 lacs. It varies from lender to lender. However, you can get instant or pre-approved loans from banks where you have completed your KYC verification.
- The personal loan using an Aadhar card offers loans with attractive interest rates starting at 10.25%. However, you can negotiate the interest rate if you have a good relationship with the lender. It is an add-on if you maintain clean financial records and a good credit score.
- You can start repayment in the upcoming month from the day you receive the loan amount. The repayment tenure can be from 12-60 months.
A Quick Overview
Applying for a personal loan using an Aadhaar card can be a quick and hassle-free process. Aadhaar is a 12-digit unique identification number issued by the Indian government that serves as a proof of identity and address. Here is a step-by-step guide on how to apply for a personal loan using an Aadhaar card:
Step 1: Check your eligibility. Before applying for a personal loan, you must check if you meet the eligibility criteria set by the lender. The eligibility criteria may include age, income, credit score, and employment status.
Step 2: Choose a lender. Once you have checked your eligibility, you can choose a lender that offers personal loans with attractive interest rates and flexible repayment options. You can compare the interest rates and other terms and conditions of different lenders online.
Step 3: Apply online. Most lenders allow you to apply for a personal loan online. You can visit the lender’s website and fill in the application form with your personal, employment, and financial details.
Step 4: Upload your Aadhaar card. When you apply for a personal loan online, you must upload a scanned copy of your Aadhaar card as proof of identity and address. Make sure that the details on your Aadhaar card match the details you have provided in the application form.
Step 5: Complete the verification process. Once you have submitted the application form and uploaded your Aadhaar card, the lender will verify your details. The verification process may include a telephonic or in-person verification.
Step 6: Disbursement of the loan amount. If your application is approved, the lender will disburse the loan amount to your bank account. Make sure that you have provided accurate bank details in the application form.
Financial institutes in India are constantly evolving to cater to the changing needs of consumers. Why wait in a long queue with a pile of documents when you can sit at home and apply for the loan, and that too using minimum documents?
One of them is a personal loan using an Aadhar card. A personal loan is obtained handily and hence has become the first choice of a borrower.
However, bear in mind that availing of a personal loan is best when you have an emergency to handle and financial help is inevitable. You have to examine your financial situation to determine whether you can pay the interest on time, which otherwise can result in penalty charges.
You take a personal loan when you need it the most. Hence choose the lender who meets your requirements. You have to make an informed decision that meets your needs.