All The Documents Required For Personal Loan In India

Personal loans can be a lifesaver in times of need. Multiple factors could be the reason why one would require a personal loan. The last thing you want is to be rejected when applying for one. You will have to provide the lender with some documents for a personal loan in India.

Keep in mind that each state and bank have additional documents they could ask for. These are mandatory documents required for one to apply to get a personal loan. Please check with the bank to which you are applying to learn more about the documents they need.

What are the types of personal loans available?

There are two types of personal loans available in India.

• For salaried Individuals
• For self-employed Individuals

The documents required by any bank are almost the same, with just some variations. This is because self-employed individuals must prove that they can repay the loan. For salaried individuals, the documents are much more accessible. This is because they have an employer and a salary account with a registered bank or organization. 

What are the eligibility Criteria For Applying For A Personal Loan?

As with any loan, there is an eligibility criterion that you have to meet to apply. The following are the eligibility criteria for a personal loan: If you meet the requirements, you can move on to the documents required.

• Nationality: Indian (The nationality of the person applying must be Indian. Yes, loans are given to NRIs, but the process is much more tedious.)
• Age: 21 to 67 years of age (The age limit begins at 21. The cutoff age is at 67. There are plans by the government for people above 67 also to secure a loan. But this needs to be discussed with the respective bank.)
• Employment: Private or public sector (This is crucial for any bank to give you a personal loan.)
• CIBIL score: 750 or Above (A good CIBIL score is not only key to getting accepted, but it also speeds up the process. A good CIBIL score indicates that you repay your debts on time. This is something that most banks look for.)
• Monthly salary: 15,000 INR (This amount varies depending on the bank and city you are applying in. The monthly salary allows the bank to know how much your monthly income is and how well you will be able to pay back your EMIs.)

Documents required for a personal loan for salaried individuals

The following are the documents required for a personal loan for a salaried individual:

Identity proof: Passport, PAN Card, Voter’s ID, Aadhar Card, or Driving License

Identity proof is crucial when applying for a personal loan. You can pick one of the above to submit as your identity proof. Most banks prefer to give a personal loan on an Aadhar card. This has become mandatory by the government and RBI.

Address proof: Passport; Utility Bill (telephone, electricity, water, gas, all less than two months old); Aadhaar Card; Driving License; Ration Card. 

The address proof is vital. You can use any of the bills mentioned above as address proof. It is for communication purposes. Since your Aadhar card has your address, banks prefer to give you a personal loan on your Aadhar card.

Income proof: Salary slips (from the last three months) or bank statements of the previous 3-6 Months 

The bank statement is essential when applying for a personal loan as a salaried individual. This allows the bank to know if and when you get your salary. You can use your salary slip or bank statement for the last few months. This ensures the bank that you are a salaried individual and get your compensation regularly.

Tax documentation: IT returns (for two years)/ Form 16

These documents allow the bank to know that you are a taxpayer. Every employed citizen must pay their taxes. This helps the bank build trust with you. 

Ownership of residence: Property documents; maintenance bills; electricity bills

This is for those applying for home loans, but it is also used for personal loans. This again falls under address proof. You can use a rental agreement if you do not own a home. This needs to be decided by the bank you are applying to.

Current employment proof: Current employment certificate, job appointment letter, or experience certificate

You must prove your employment status if you are applying for a personal loan as a salaried individual. This is mandatory for all Indian citizens. You can provide your current employment certificate or current job appointment letter. This ensures that you are currently employed by an organization.

Documents required for a personal loan for self-employed individuals

For self-employed individuals, the records are similar to those for salaried individuals. The only difference is proof of income and ownership of a business. Since self-employed individuals work on their terms with no organization to back up their salary structure, the bank needs to know if they can pay on time.

Identity Proof: Passport, PAN Card, Voter’s ID, Aadhar Card, or Driving License

Address Proof: Passport; Utility Bill (telephone, electricity, water, gas, all less than two months old); Aadhaar Card; Driving License; Ration Card. 

Ownership of residence: Property documents/ Maintenance bill/ Electricity bill

Proof of office address or ownership: Maintenance bill, property documents, or an electricity Bill

Since self-employed individuals work for themselves, this is mandatory. Proof of ownership of an office or an office address for communication is required. 

Proof of Business: GST registration, company registration license, or shop establishment proof

Since self-employed individuals work for their businesses, there must be proof that the business exists. This is vital for any bank that provides you with a personal loan. 

Proof of income: (Any one)

• During the most recent two years, the applicant’s income tax returns and a certified copy of the Chartered Accountant’s computation of their income.
• Statement of Tax Audit Results with Profits and Loss numbers.
• Passbook or bank statement showing the deposit and withdrawal history of the past year.

The choices mentioned above allow the bank to know the borrower’s capability of repaying the personal loan. You can provide any of the documents mentioned above as proof of income.

Conclusion

The information mentioned above is for all the documents required for a personal loan. Please note that these are just the mandatory documents required. Some banks and states could ask for an additional one. Rest assured that with these, you will not face any rejection from the most popular banks in India.