What are the documents required for personal loan applications?

Posted on Wednesday, December 13th, 2023 | By IndusInd Bank

Whether you are a salaried employee or a self-employed individual, a personal loan is a versatile financial tool that can help you meet your financial requirements. The popularity of personal loans stems from the fact that they don’t require collateral and come with no usage restrictions. However, the documentation required will differ significantly based on the type of employment and your income.

This blog will take you through the important documents required while applying for a personal loan, how to use a personal loan, and a few tips to prepare your documents.

Documents required while applying for a personal loan

The eligibility criteria and documentation required for a personal loan vary for a salaried employee and a self-employed professional. Before applying for a personal loan, it is advisable to check your eligibility.

Most financial lenders require you to provide the following documents while applying for a personal loan:

For salaried employees

• Application: Duly filled application form with photograph
• Proof of identity: You must submit a self-attested photocopy of any one of the following:
  • Driving license
  • Passport
  • Voter ID
  • Aadhaar
  • PAN
• KYC requirements: You must furnish the required KYC documents like valid identity / residence / signature proof
• Income proof: You must submit Form 16 / ITR for the last 3 years and the latest 3 months’ salary slip
• Banking requirement: You must submit the latest 3 months’ salary credit bank statement

For self-employed individuals

If you are a self-employed professional, you will have to furnish the same documents as submitted by a salaried employee. However, the banking requirement differs here.

Banking requirement: You must submit the latest 6 months’ practice current account and the latest 3 months’ primary savings account bank statements.

There are a few loan providers like IndusInd Bank that do not require any physical documentation. Furthermore, the application process is 100% digital with no income-proof requirement. This simplifies the entire personal loan application process and makes the disbursal process quick and efficient.

How to make the best use of a personal loan?

A personal loan can be used to meet emergency requirements, fund your child’s education or take care of any other expenditure. Below are various ways to utilise an IndusInd Bank Personal Loan for diverse financial needs.

1. Personal loan for education

A personal loan can be used to finance your / your child’s education and various expenses linked to it. It can help:

• Cover tuition fees, cost of stationary and study material
• Cover living expenses
• Consolidate any existing debt
• Manage travel expenses (visa and flight tickets)
• Meet emergency expenses

2. Personal loan for medical expenses

You can use a personal loan to manage your medical expenses, especially if you do not have health insurance. It can help:

• Pay medical bills, if you do not have insurance
• Pay medical expenses in hospitals not covered by insurance
• Finance expensive cosmetic procedures
• Cover the cost of prescription drugs
• Pay for dental expenses not covered by insurance

Personal loan for home renovation

If a home renovation is due, you can use a personal loan to cover the expenditure involved in renovating your home. If you want to calculate and know the EMI on your personal loan before applying for one, you can use the IndusInd Bank Personal Loan EMI Calculator.

A personal loan can help cover the below-mentioned expenses related to home renovation:

• The costs of purchasing construction materials and supplies
• Labour costs, like hiring contractors, plumbers, and other skilled professionals
• Expenses related to acquiring licenses and permits
• Expenses related to renting out specialised equipment or tools
• Costs associated with landscaping, architectural and design services, contractor fees, and unexpected expenses

4. Personal loan for wedding

A wedding is accompanied by expenses which can be tough to cover. This is where a personal loan for a wedding can come in handy and help finance your dream wedding. It helps cover:

• The cost of the venue, decorations and catering
• The cost of your wedding attire 
• The cost of your honeymoon package 
• Any unexpected expenses involved

5. Personal loan for travel

If you are someone who loves travelling and exploring new places but avoids doing so due to lack of sufficient funds, an IndusInd Bank Personal Loan can help make your travel aspirations a reality. A personal loan can be used to cover the below-mentioned expenses associated with your travel:

• The cost of airfare, accommodation, and transportation expenses like train tickets or car rentals
• The cost of travel insurance and visa or documentation fees
• The cost of fees associated with sightseeing activities
• The expenses incurred while dining out or attending entertainment shows/concerts, and other nightlife experiences
• The expenses involved in shopping 

Tips to prepare your documents for a personal loan application

• Checklist: The best way to gather the required documents for an instant personal loan is to have a checklist. This ensures you do not miss out on any important documents.
  
  

• Validity check: Always check if your identity and address proofs are valid. Expired documents are generally not accepted by any bank / financial institution.
  
  
• Clarity in documents: All the document copies and scans must be legible and clear. Blurry documents can delay your application processing time.
  
  
• Double-check the requirements: Every lender has a different set of requirements. Make sure you cross-check all the document requirements and submit the right ones.
  
  
• Linking of mobile number to Aadhaar: You must link your mobile number to your Aadhaar card as applications for an instant personal loan are processed online.
  
  
• Linking of Aadhaar to PAN: According to Section 139AA of the Income Tax Act, individuals have to link their Aadhaar to their PAN. This enables the IT department to track financial data and get rid of PAN duplication. Furthermore, failure to link these two documents can cost you a hefty fine and your PAN might become inoperable.
  
  
• Accurate contact information: Your contact details, like your name, phone number, email address and physical address, must be accurate and the same in all documents given to the lender.
  
  
• Maintain document copies: It is important to retain your original documents and submit copies of them to the lender.
  
  
• Make smart lender choices: You should consider lenders that offer a 100% digital application process, such as IndusInd Bank, to avoid paperwork and documentation hassle. This will help you get your funds quickly!

Conclusion

The application process of applying for an online personal loan might appear to be time-consuming and exhausting. However, following tips like organising your documents and making smart choices by choosing lenders like IndusInd Bank can speed up the application process. If you are seeking an instant personal loan at affordable interest rates, consider applying for an IndusInd Bank Personal Loan. Don’t wait too long, apply now!

Disclaimer: The information provided in this article is generic 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.