Why Salary Slips, Bank Statements & ID Proof are Important for Availing Personal Loan

Posted on Thursday, August 1st, 2024 | By IndusInd Bank

When you apply for a personal loan, you must provide the right documentation to ensure a smooth and successful application process. 

Among the necessary documents, the salary slip, bank statement, and identification proof are of utmost importance. These documents confirm your identity and assess your financial stability and ability to repay. 

Let’s explore why these documents are crucial to processing your personal loan application.

Why You Need Important Documents for Availing a Personal Loan

The required documents for a personal loan may vary for salaried professionals and self-employed individuals. 

 For Salaried Professionals

1. Salary Slip 

A salary slip is a critical document for a personal loan, as it provides proof of regular income. It helps the lender assess your financial stability and ability to repay the loan. Regular income from a stable job increases the chances of loan approval. 

It also verifies the income mentioned in the loan application to avoid any discrepancy. Hence, it is one of the important documents for taking a personal loan. 

2. Bank Statement

This document provides a comprehensive view of your financial transactions, your income, expenses, and savings habits. A few months’ bank statements also help the bank evaluate your repayment capacity. The bank analyses your income flow and existing financial commitments to get clarity on how you would repay the personal loan. 

If you have had a previous loan, bank statements show your repayment history. This can have a positive effect on the loan approval process.

3. Identification Proof

Proof of identity, such as an Aadhaar Card, or PAN card, is one of the important documents required to verify your identity. It ensures that the personal loan application is legitimate. Also, it is a legal requirement to provide proof of identity when applying for a loan. You can also provide a driver’s license, voter ID, or passport as identity proof. 

For Self-Employed People

1. Income Tax Returns (ITR)

For self-employed individuals, ITRs act as proof of income instead of salary slips. They provide a record of annual earnings and help the bank in assessing the financial stability of the applicant. 

2. Bank Statement

Self-employed individuals must submit the required documents to help the bank gauge their income and financial management. A bank statement reflects the overall performance of the business and lists all transactions, expenses, and so on. With its help, the bank can get insights into the borrower’s financial health.

3. Identification Proof

As with salaried individuals, an identification proof is essential for verifying the identity and address of a self-employed professional. 

When you apply for a Personal Loan, you must also provide KYC documents (valid identity/residence/signature proof) and Form 16/ITR for the last 3 years. A filled-out application form with your photograph is also necessary. 

Also Read: Essential Criteria for Qualifying for a Personal Loan

Say Yes to Effortless Digital Personal Loans

To sum up, important documents like salary slips, bank statements, and ID proofs help the bank assess the borrower’s identity, financial stability, and repayment capacity. Whether you are a salaried professional or self-employed, you must provide these documents to have a smooth application and increase your chances of approval.

Modern banks, such as IndusInd Bank, have eliminated the need for physical paperwork. Our application process is entirely digital and doesn’t require proof of income, streamlining the personal loan application and speeding up disbursal. Here are the documents you will need to furnish digitally during the online application process:

• PAN Card 
• Aadhar Number

If your current address of residence differs from what is updated on your Aadhaar Card, you will need to share one document from the following list: 

• Driving License 
• Voter ID 

• Passport 
• Self-Declaration of address
• Optional document (to enhance your eligibility): Six Months Bank Statement

To make your personal loan experience smoother, consider using IndusInd Bank’s Personal Loan Calculator before applying with us. This handy tool gives you an idea of the EMIs you will have to pay when you apply for a certain amount and tenure. This way, you can plan your repayment strategy with ease. 

Apply for a Personal Loan with IndusInd Bank today! 
Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your 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 making any financial decisions based on the contents and information.