An Aadhar Card not only acts as a photographic proof of identity, but it also indicates proof of citizenship, help you buy SIM cards, apply for other documents like PAN Card and Passport.
One can also avail personal loan from banks with the help of Aadhar Card.
Impact of Aadhar Card on Personal Loan:
- Simpler KYC Verification:
To get loan online, it is now mandatory to get your digital bank accounts linked to your Aadhar. People who are looking forward to avail Personal Loan online must submit their ‘KYC’ or ‘Know Your Customer’ Documentation. This process used to be very time-taking and required a lot of documents. But now it is easy because of Aadhar Card as it contains our biometric information and other details.
- Digitalization of the Process:
Banks have already started digitalizing the verification process named as e-KYC. In this method, the whole process can be done online. As Aadhar has all the information of the individuals on an online data-base, it could easily be linked online in no time.
- Quicker Loan Approval:
One usually needs a personal loan in the time of emergency and hence, needs it as earlier as possible. Before Aadhar Cards, people were required to verify a lot of documents to get a loan approval. But now, Aadhar Card has made the process quick. You may get your loan approved in no time because of the card being digitalized.
Documents required for a Personal Loan through Aadhar Card:
Other than Aadhar Card, you will need these documents to get a Personal Loan from a bank:
- Identity Proof: PAN Card/ Passport/ Voter ID Card/ Driving License
- Residential Proof: Electricity Bill/ Ration Card/ Passport/ Rent Agreement in case of rented housing/ Driving License
- Income Proof: Bank statement of last 3 months
- Photographs: Passport sized photographs to attach in various forms
Additional Documents required in case of Self Employed individuals:
- Latest Income Tax Returns
- Balance sheets, profit and loss statements, income computation- all certified by a CA.
- Proof of Business Continuation
Impact of Aadhar Card on Private Sectors:
Personal loans are unsecured loans and do not require any security or collateral. So, it is necessary to take safety measures while lending money to borrowers. The government has made the KYC process mandatory not only in public but also in private sectors.
Even Private Sector Banks require document verification and validation of the applicant. This measure was taken to reduce money laundering in the market.
It has reduced the time taken for document verification as well as the hassle of making frequent visits to the loan provider.
The Bottom Line:
The introduction of the Aadhar card to financial sector has made it quick and easy to apply for a personal loan. It is easier for the banks and other loan providers to verify documents. The accessibility of demographic and biometric data from its database has made online verification hassle-free. Aadhar card has contributed to people getting their personal loans on time.