Personal loan application: What are the documents required for a personal loan? | Mint

Are you planning something significant in your life, such as a wedding, remodelling your home, or that long-awaited bucket list vacation? At times like these, a personal loan can be a convenient source of finance. However, before applying, however, you’ll need to provide the following documents to the lender: 

In this article, we will examine the key documents required for a personal loan.

Understanding personal loans

A personal loan is an unsecured loan that offers you a one-time payment sum that can be used for any purpose, such as debt consolidation, medical emergencies, home renovations, travel and more. 

Personal loans can be your solution for flexible financing options with speedy disbursal and competitive interest rates. To avoid being burdened financially, carefully consider your repayment capacity and choose the right lender with clear terms.

Documents required for applying personal loan

To ensure a fast and timely personal loan approval, you must provide the lender with documentation verifying your identity, income, and trustworthiness. Let’s look at the major documents required to apply for a personal loan:-

1. Documents required for salaried individuals

Salaried individuals must submit the following documents, together with a properly completed personal loan application form:

• IT returns (for two years)
• Form 16

Residence proof (any one):

2. Documents required for self-employed individuals

Self-employed personal loan applicants are often required to submit the following documents, along with a fully filled loan application form and passport-sized photographs:

Identity proof (any one):

• Passport
• PAN card
• Voter’s ID
• Aadhaar card
• Driving license

Address proof (any one):

• Passport
• Aadhaar card
• Driving license
• Utility bill (less than 2 months old)
• Ration card

Proof of residence ownership (any one):

• Property documents
• Maintenance bill
• Electricity bill

Proof of office address and ownership (any one):

• Maintenance bill
• Property documents
• Electricity bill

Proof of business existence (any one)

• Copy of GST registration
• Company registration license
• Shop establishment proof

Income proof

• Last two years’ income tax returns of the applicant
• Audited balance sheet and profit & loss accounts
• Savings/current account bank statement/ bank passbook for the past year

Submitting correct and complete documents early helps reduce processing delays and significantly increases the chances of getting a personal loan.

Conclusion

Knowing the precise documents required for a personal loan simplifies the application process. Organising and submitting all necessary paperwork methodically while making the application can significantly speed up the approval procedure and fund disbursement.

Remember, each lending institution has its own set of requirements. Therefore, it is advisable to consult your preferred financial institution for a specific list of documents required. Being well-prepared and organised ensures a smoother personal loan application process, helping you achieve your financial objectives efficiently.