Specifics of the Personal Loan Documents required for loan approval
Taking a loan out to meet your personal finance needs has never been so easy. In today’s day and age there are a plethora of options available in the personal loan finance space to appeal to every customer. With such a variety to choose from, the borrower needs to be careful that the choice they make suits their requirement and capacity for repayment. One of the factors that the borrower would need to consider would be the personal loan documents required to be furnished to the lender. These documents are used by the lender to measure the viability of lending the amount to a particular borrower and are a key factor in determining whether the personal loan gets approved or not. HeroFinCorp is one of India’s leading NBFCs which offers innovative loan products with minimal hassle and paperwork.
This is a list of documentation required to apply for a personal loan. These documents are needed so that the lender can verify certain details about the borrower.
In case of salaried borrowers the following documents should be provided to the lender.
- Mandatory documents
- An application form correctly filled out with personal information such as name, address, phone number, date of birth, etc. It might also require you to state your desired loan amount and loan purpose.
- Passport size coloured photograph.
- Identity Proof
This is the basic document required to be furnished when applying for any loan. It helps to confirm the borrowers name, age, gender and physical appearance. Any one of these documents can be provided – Driver’s Licence, Passport, PAN Card or Aadhaar card.
- Residence Proof
Assists in confirming permanent and current place of residence in case it differs from one another. Either Driver’s Licence, Passport, Aadhaar Card, Ration Card, or Utility Bill can be submitted.
- Residence Ownership Proof
In case the borrower owns the place of residence any of these documents can be provided – Electricity Bills, Maintenance Bills, Property Documents
- Income Proof
To confirm the monthly salary of the borrower and consequently to measure their repayment capacity income documents are required by way of last six months salary slips, last six months bank account statement (salary account) and Form 16 from the borrower’s employer.
- Job Continuity Proof
To check on job stability the appointment letter from the current employer and experience certificates from previous employers is required.
In case of self-employed, professional or nonprofessional individuals, the loan documentation differs slightly. The mandatory, identity proof and residence proof documents remain the same as for salaried individuals. In addition the following documents would be required:
- Office Address Proof
The place to doing business can be verified with either a Maintenance Bill, Utility Bill, Property Document or Rent Agreement.
- Business Existence Proof
The legitimacy of the business can be checked with a Copy of Tax Registration, Shop Establishment Proof or Company’s Registration Certificate.
- Income Proof
Again the ability of the borrower to repay the loan can be measured with both the last six months bank statement and ITR for the last two consecutive years.
These personal loan documents required by the lender are crucial to successfully apply for the loan. As the personal loan is unsecured and there is no collateral there is always a risk of the borrower defaulting on payments and/or absconding with the loan amount. Hence the borrower has to be extremely careful before approving the loan. He has to get to know and understand the borrower thoroughly so that he can make the best offer and successfully disburse the loan.
In case the lender feels it necessary then they may ask for additional documents to help in their decision-making process. Copies of all these documents are submitted and verified with originals which need to be carried when visiting the lender’s branch. In case of online applications, e-KYC and online submission of documents is also accepted. A correct application form and verified documents will ensure quicker processing of the loan. An additional benefit is in case the borrower already has an existing relationship with the lender then resubmission of the paperwork would not be required.