Borrowing money has always been the ideal solution for people who need money immediately. It is true that there are hundreds of banks and credit institutions ready to lend money to those who need it. There are different types of easily recognizable loans. For example, if you are looking for short term loans, you can opt for payday and personal loans. On the other hand, mortgages are the right options for you if you need to buy property like houses and cars.
Although there are many options for borrowers, personal loans are the most common. Whatever your borrowing goal, it is possible to seek help from the bank. People who receive personal loans use the money primarily for personal purposes, such as monthly budgeting, school fees, and emergencies.
If you are from India, it is easy to apply for personal loans using your Aadhaar. Let’s take a look at some key points and how you can apply for a personal loan.
What is an Aadhaar personal loan?
An Aadhaar personal loan is the type of loan you can avail with your Aadhaar card. This loan has the same features as a typical personal loan. The only difference is that it is attached to your Aadhaar card for easier process and release. So, when you have your Aadhaar card with you, you can easily avail the privilege of personal loans.
What is the Aadhaar card?
Now you might be wondering what is so important about the Aadhaar card. To begin with, an Aadhaar card is proof that you have received a 12-digit number called Aadhaar. It is a paperless electronic Know Your Customer (KYC) document with all the criteria for a borrower to be eligible for a personal loan. This number can be acquired by any Indian citizen, including non-resident passport holders and resident aliens who have stayed more than 182 days in the country.
Once you have your Aadhaar card, you can easily apply for personal loans in the country. What makes the app more convenient is that all your identity information is saved on your Aadhaar card. This way, the lender can get all the personal information they need from you. Thus, facilitating the process.
The Unique Identification Authority of India, also known as UIDAI, collects all information and biometric data from its citizens and residents. UIDAI is a statutory authority created to assist the government in implementing its biometric identification system. Since a trusted and reliable authority issues Aadhaar, it explains why lenders rely on it when granting personal loans to borrowers.
How to apply for a personal loan on Aadhaar?
The process is quite simple and applies to all borrowers and lenders.
Check your eligibility
First of all, you must check if you are eligible for a personal loan. Although those with an Aadhaar card may be eligible to borrow, the amount you can borrow varies. So check how much you can borrow online. If your lender has their own website, you can quickly check in two minutes.
After checking your eligibility, the next thing you need to do is compare offers. Don’t settle for high interest rates. Remember that there are a large number of banks and lenders offering personal loans if you have an Aadhaar card.
All you have to do is list them carefully and compare the best deal you can get. Research more than one option and be sure to do your due diligence. Almost all lenders have their website now. You can google them and check their websites to get the information you need.
Choose your plan
More often than not, you’ll have the ability to customize the amount you can borrow as long as it stays within the limit you can get. You can also choose how long you will pay for it. When choosing a plan, be sure to select the best option that suits your financial capacity.
For example, if you think you can repay the loan in just three months, choose this period in order to save on the interest rate. If you can’t, you can opt for a longer payment period for your convenience. Also, choose the loan amount according to your financial needs. Don’t borrow more than you need to avoid hassles later.
Apply online and upload your documents
The Internet has done so much in the financial sector. Nowadays, you no longer need to go to the physical branch of your chosen lender to apply and submit your documents. As it is common to have a website, you can simply visit your lender’s website, apply online and upload your documents.
Be sure to upload the full set of documents needed for your lender to assess your application. If you do not have complete documents, your application may be rejected immediately.
Wait for your loan approval and get loan amount
The last step is waiting for your loan approval. Once approved, you will get the loan amount you requested. Carefully read the repayment terms of your loan.
Essential Things You Need To Know About Aadhaar Personal Loans
While applying for Aadhaar personal loans, you need to consider factors other than your eligibility. The fees and the list of documents you need to submit play a vital role in your application.
Fees to consider
The first type of fee to consider is the interest rate. There is no fixed interest rate as everything will depend on your lender. There are lenders with rates starting at 1.33% per month. This can increase depending on many things. To get the lowest interest rate, compare the current offers on the market and opt for the one that offers the best rate you can tolerate.
Another fee you must pay is the loan processing fee. Again, this will depend on your lender. The rate usually starts from 2% to 8% of the approved loan amount. Lenders deduct these processing fees up front before releasing the remaining loan amount to you.
Penalties are another thing. If you delay your payment, for example, you will have to pay an additional 2% or more per month of the outstanding loan amount. This is an additional expense that you may want to avoid if your budget is tight. Penalties can be avoided by paying on time.
Some lenders also charge for bad checks. If you use post-dated checks to pay your monthly dues, make sure your account has enough money to cover the payment. Otherwise, you will have to pay an additional Rs 500 each time your check is refused.
Although it is rare to have fees on loan cancellations, you should remember that loan processing fees will always be deducted. If you terminate your loan, the application fee serves as a termination fee that you must bear.
Documents required when applying
There are mainly three paper requirements when applying for an Aadhaar personal loan: proof of identity, proof of address and proof of income. Your proof of identity can be your PAN card, Aadhaar card, voter card, Indian passport or driver’s license. You can submit the same requirements or your utility bills to serve as proof of address. To prove your income, you need your bank statements for the last three months.
These requirements apply to salaried and self-employed borrowers.
Personal loans are the easiest type of loan to get and if you have your Aadhaar card, you have a high chance of getting your loan approved.