It might just be a matter of minutes for the actual loan to be processed but preparation requires some time. However, when you have decided to go ahead with your application for a personal loan you need to gather certain documents to complete the process effortlessly and avail the loan.
The easiest way to go would be to apply online. Post personal loan application, an executive visits you from the bank to collect the documents and verify details. Following are the documents that you need to keep handy before you start the process of your application for a personal loan.
Proof of Identity
It could be your birth certificate, passport, driving license, voter identity card, PAN card or Aadhaar card. You can present any one of these as your proof of identity.
Proof of Address
The bank requires proof of the place you reside in as this will be the address at which communications will be delivered. As proof of your address, you can present your utility bills, passport, bank account statement or passbook and Aadhaar card.
Proof of Employment
The bank is not asking for any security against personal loan but yet it must ensure that you have an income to repay the loan. For this purpose, you need to furnish your employment details. Proof of employment requires your employee identity card and employee visiting card.
Duration of Employment
After stepping out of college, you get a job and soon want to purchase a car. The bank will not accept an application for such short job duration. Most banks look for at least a year or more of employment.
Along with the duration of employment, the bank needs to be sure that you have been a steady employee and not one skipping jobs or going jobless for extended periods. You will have to furnish appointment letters of previous employers.
If you have ever defaulted on a loan, it can go against your application strongly. Your credit history is checked with banks you have a relationship. In some cases, you also need to present your Form 16 of the current year and previous year.
Once an application for a personal loan is submitted, you will be granted the loan only when all documents are cross-checked, details verified and the bank has the assurance that you will be repaying the loan amount.
When all the formalities are completed and details verified, the loan is offered to the customer. As a customer, every effort should be made to repay the loan as early as possible. This not only relieves you of the loan burden but also keeps your credit history clean.