Whether you want money to cover your medical expenses, pay for a vacation overseas, cover the cost of studying abroad, or renovate your home, you may conveniently apply for a Personal Loan with a suitable financial institution. Besides, an increasing number of individuals are applying for this Loan.
Certain Personal Loan documents are required when applying for one. Let's learn about the various documents you need to apply for this Loan.
Overview of a Personal Loan
A Personal Loan is an unsecured credit provided by various financial institutions. Hence, you do not need collateral to apply for this Loan. It is also available with minimal documentation. A Personal Loan usually works like other Loans. When you apply for this Loan, you need to submit certain documents. The financial institution determines your creditworthiness and makes a Loan offer.
Like any other Loan, you need to repay a Personal Loan according to the agreed terms. However, unlike a Home or Auto Loan, which you need to use for a specific purpose, the funds you get when you apply for a Personal Loan can be used for any purpose. Financial institutions usually do not have any restrictions on the end usage of funds unless you use them for any illegal purchase or other unlawful activities.
Hence, you can use the money you get from a Personal Loan for various purposes, like buying a gadget, paying for a dream vacation, or expanding your business. However, when applying for, you need to meet specific Personal Loan criteria:
- Age
- Minimum income
- Employment
- Credit score
- Nationality
- Work experience
When you meet the eligibility criteria of your chosen lender and have a good credit score, you can usually get the Loan in a few days. Some financial institutions might allow you to apply for a Personal Loan online. This way, the process is also typically paperless.
Documents required
When applying for a Personal Loan, you need to be mindful of some Personal Loan documents. A few of the essentials include:
- Your PAN card
- For salaried individuals, you need the salary slips for the previous three months
- Proof of income or financial statements for individuals who are self-employed
- Bank statements for the previous six months.
- Application form, duly filled and signed
- Income tax returns or Form 16
- Proof of age
- Proof of address and identity
While these are some of the documents you might require when applying for a Personal Loan, for detailed information, you can check with the financial institution you are borrowing from.
Conclusion
Personal Loans are a widely availed financial product that lets you borrow money for multiple purposes. However, when applying for it, you should consider the required documents.
