Documents Required and Eligibility Criteria for Personal Loan

When in need of financial assistance, individuals often consider personal loans, which are offered by lenders upon submission of the correct documents. 

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Your eligibility for personal loans depends on factors such as your profession, credit score and the documents you provide. 

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Once verification is complete and criteria are met, the personal loan can be sanctioned seamlessly. 

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Documents Required While Applying for a Personal Loan 

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Personal loans are unsecured loans which are used to meet unexpected financial needs such as medical expenses, vacations, higher education, wedding, home expenses and debt repayments. 

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Given below is the list of common documents needed for personal loans, based on the category of the applicant:  

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Documents Required for Salaried Individuals

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To be eligible for personal loans, salaried individuals need to submit the following documents along with a duly filled personal loan application:

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Photo Identity Proof

• Aadhar Card
• Driving License
• PAN Card
• Passport
• Voter’s ID

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Address Proof

• Aadhaar Card
• Driving License
• Passport
• Ration Card
• Utility Bill (telephone, electricity, water, gas – less than 2 months old)

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Income Proof

• Bank statements for the last 3 to 6 months (showing salary credit)
• Salary Slips (Last 3 months)

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Tax Paid

• IT returns (for 2 years)
• Form 16

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Residence Ownership

• Property documents
• Electricity bill
• Maintenance bill

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Proof of Job Continuity 

• Current employment certificate
• Current job appointment letter (if more than 2 years have been spent in the same organisation)
• Experience certificate (previous employer’s relieving or appointment letter along with job certificate)

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Documents Required for Self-Employed Individuals

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Self-employed personal loan applicants are generally required to submit the following documents along with a completed loan application form with passport-size photos:

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Photo Identity Proof

• Passport
• PAN Card
• Voter’s ID
• Aadhaar Card
• Driving License

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Address Proof

• Passport
• Aadhaar Card
• Driving License
• Utility Bill (telephone, water,  electricity,  gas) – less than 2 months old
• Ration Card

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Proof of Residence Ownership

• Property documents
• Maintenance bill
• Electricity bill

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Proof of Office Address and Ownership

• Property documents
• Maintenance bill
• Electricity bill

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Proof of Business Existence

• Copy of GST registration
• Company registration license
• Shop establishment proof

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Income Proof

The last 2 years’ Income Tax Returns of the applicant along with the computation of income duly attested by a Chartered Accountant.

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Audited balance sheet and Profit & Loss accounts, including the tax audit report, if applicable.

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Savings/current account bank statement/bank passbook for the past year.

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Documents Required for NRI Applicants

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NRI applicants require the following documents to verify their eligibility for personal loans:

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Identity Proof

• Copy of the passport
• Copy of the visa

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Employment Proof

• Letter of Appointment
• Job contract
• Labour/ Identity card (if applicable)
• Official email ID or the HR’s email ID

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Income Proof

• The last 6 months' bank statements
• Last 6 months’ salary slips or salary certificate

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Documents Required for Pensioners

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Pensioners require a few basic documents to be eligible for personal loans. Take a look:

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Identity/Age Proof (Any one)

• Aadhar card
• Birth certificate
• Driving licence
• School leaving certificate
• Passport
• PAN card
• Ration card
• Voter ID card

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Address Proof (Any one)

• Passport
• Aadhaar card
• Utility bills
• Ration card
• Driving licence

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Income Proof (Any one)

• Last 6 months’ bank statements/salary slips
• Bank passbook
• Form 16
• Copy of pension payment order
• Income tax returns

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Eligibility Criteria for Personal Loans

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The following people are eligible to apply for a personal loan:

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• Employees of private limited companies, employees from public sector undertakings, including central, state and local bodies
• Individuals between 21 and 60 years of age
• Individuals who have had the required job experience 
• Those who earn a minimum net income per month 

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Personal Loan Eligibility Calculator

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Personal loan eligibility depends upon several key factors such as monthly income, nature of employment, CIBIL score and so on. 

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For a seamless loan approval process, you need to first check the eligibility for personal loans. 

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You can use the online personal loan eligibility calculator to determine your eligibility. It is an easy-to-use and free online tool that estimates your eligibility accurately. 

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Tips to Improve Your Eligibility for Personal Loans 

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Here are a few tips that will help you with personal loan approval:

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Maintain a High Credit Score

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A credit score for loans above 750 is regarded as excellent and allows you to negotiate for better interest rates.

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Improve CIBIL Score

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Reducing unnecessary expenses and avoiding new debts can reduce outstanding credit card dues, improving your CIBIL score. 

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Have Multiple Income Sources 

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By showing the lender your multiple income sources, apart from your basic monthly income, you can assure them of your loan repayment capabilities.

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Reduce Debt to Income Ratio

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Increasing your income to bridge the gap to reduce debt to income ratio will enhance your eligibility for personal loans. 

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Final Word

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The eligibility for personal loans focuses on different factors, such as credit score, income level, employment status, debt-to-income ratio and the applicant's financial history. 

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Moreover, the list of documents required to be eligible for this loan varies for different individuals. 

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You must ensure to have all the required documents and fulfil eligibility criteria before applying for a personal loan. Once you are sure, sign up in Jar and get an instant loan to avail its benefits. 

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Frequently Asked Questions

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1. What can I use personal loans for?

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Personal loans can be used to meet any type of expense, ranging from home renovations to luxury vacations or debt consolidations. It can be also used for paying unexpected medical bills, making investments in business or bearing vehicle repair costs. 

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2. Is there a minimum personal loan amount that can be borrowed?

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The exact amount of minimum personal loans varies from one lender to the other. However, most of the lenders set their minimum amount to ₹10,000. 

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3. What are the key documents required for a personal loan?

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The key documents required for personal loans for any individual are:

• Income proof (Income statement/salary slips)
• Address proof (Passport/utility bills)
• Identity proof (Aadhaar card/driving license)

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4. What are the key steps in the loan approval process?

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The entire process takes about 48 hours to two weeks of time where once you apply for the loan and submit the required documents, the verification process begins. 

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Once done, the loan is sanctioned and disbursed within 7 working days by the bank.