Personal loans are quite popular these days and are certainly based on income, age and the credit score of an interested individual. They are made available both online (website/mobile app) and offline by banks and NBFCs. Over the years, address proof, age proof and identity proof related documents have played a significant role when it comes to approving the personal loan application made by a person but now has been replaced by a single Aadhaar card.
What is a Personal Loan over an Aadhaar Card?
There is not much difference between a traditional personal loan and a modernistic personal loan taken over an Aadhaar card. Within the newest process, the entire paperwork is linked to your Aadhaar account and can be configured accordingly. Also, the Adhaar Card can never improve or demotivate chances of a person getting their loan approved, neither is it related to the CIBIL score acquired. It is only put into action while verifying the identity of a particular borrower.
Benefits of availing a personal loan over Aadhaar Card
Currently, taking over the loan market by storm, Adhaar Card-based personal loans offer the following benefits:
- Loans on an Aadhaar Card have a real-time sanction rate as the applicant’s biometric is linked with the particular.
- It brings down additional paperwork, eliminating unnecessary hassles. A borrower no longer needs to submit separate documents authorising his/her address, identity, photo and citizenship.
- An Aadhaar Card serves as a valid KYC document, helping banks/NBFCs with fraud prevention and enhanced approval rates.
- Aadhaar based loans are mostly processed online, with a reduced pre-disbursal time. Thus granting the much-needed loan amount to the entitled borrower, faster.
Aadhaar Card based loan-related functionalities
- Loans over Aadhaar Card get approved in an instant backed by super fast online verification.
- The entire loan duration lasts for a period of up to 5 years.
- No collateral is mandatory, obvious for the fact that it is an unsecured loan.
- The Aadhaar card itself serves as a single document authorising the age, identity, photo, citizenship and address of the applicant.
- Latest salary slips and bank statements are also made mandatory by certain organisations.
- The required minimum level of income varies from one bank to another.
- For salaried employees, the minimum employment experience is of two years, with one year of mandatory association with the current company he/she is linked with.
- A business that has existed for the last three years is required for self-employed candidates to get their loans sanctioned.
Eligibility criteria for Personal Loan on an Aadhaar Card
Let’s check out the mandatory eligibility criteria that an applicant needs to tick off while applying for a personal loan on an Aadhaar card.
- The applicant must be 23+ years of age but not more than 60 years.
- Must be an Indian citizen, with secured employment in any private, public or multinational company.
- 650+ is the minimum credit score made mandatory for a personal loan on an Aadhaar card. A credit score of 750 is considered to be perfect.
Steps to be followed while applying for a personal loan over Aadhaar Card
Applying for a personal loan using an Aadhaar Card is quite a seamless process that one could have ever imagined. Here is a step by step process describing it in full detail:
- The procedure commences by visiting the lending party/bank’s website and comparing offers made available.
- Enter personal details.
- A representative from the chosen organisation will get in touch with you, providing all the necessary guidance.
- Proceed forward by submitting your Aadhaar card and other required documents online.
- Once verified, the loan will get approved in no time.
Things to remember while applying for a personal loan on an Aadhaar Card
There are certain things that you need to consider while opting for a personal loan using an Aadhaar Card:
Do make sure to check out the eligibility criteria made mandatory for an Aadhaar based personal loan. If opting for an online loan, do visit the lender’s website or app as convenient.
Almost all banks and NBFCs have websites of their own, serving as an adequate source of information for their borrowers and competitors. Thus making thorough comparisons between multiple offers and related interest rates is a lot easier. Never settle for a high-interest rate as it will hamper your financial stability in the long run.
Fees to be put under consideration
Similar to traditional loans an Aadhaar based personal loan demonstrates several fee types apart from the charged interest rates. The loan processing fee (2% to 8%) comes first and can vary from one lender to the other. Then some lenders charge penalties up to 2% per month due to late payment. In rare cases, there are reported scenarios of penalties being charged on bounced cheques and cancelled loans.
Indian Banks providing personal loans on an Aadhaar Card
Here is a list of banks and NBFCs providing personal loans on an Aadhaar Card:
- HDFC Bank
- ICICI Bank
- Kotak Mahindra Bank
- Axis Bank
- IDFC First Bank
- IndusInd Bank
- Tata Capital
- Bajaj Finserv
Here’s hoping that the article was useful enough, serving as a detailed guide for your Aadhaar based personal loan and related queries.