The Indian government introduced the Aadhaar card in the year 2010 to assist individuals in availing a few services in both the private & public sectors. Aadhaar number is a twelve-digit number that is given by the Indian government to all citizens by gathering their fingerprints and scans. An aadhaar card not just serves as citizenship proof but even assists individuals in getting an urgent loan of 10,000, opening a savings bank account, purchasing SIM cards, getting a PAN (Permanent Account Number) card, applying for a passport and filing income tax returns.
Major objectives of having an Aadhaar card are given below:
∙ Single identity for every citizen of India.
∙ Single cards can be utilized for identity proof, address proof and age proof. Individuals must keep various documents handy.
∙ You can avail of different government services without the assistance of brokers or middlemen.
What impact does an Aadhaar card have on a personal loan?
Individuals wishing to avail of financial services should submit their KYC (Know Your Customer) documents. The collection of KYC details of customers by the financial institutions has been made mandatory by the government to stop money laundering. Previously, several documents were required for the KYC (Know Your Customer) process. However, it is easy nowadays for this process to be completed. Banks have started the e-KYC process, wherein the whole KYC procedure is digitized. As Aadhaar contains biometric details about individuals, verification is a fast and simple process.
Public and private sector banks do extremely strict verification and validation when it is about a personal loan. Initially, several documents were supposed to be submitted by the loan seeker to get over 10000 loan on Aadhaar card, and the time taken for the approval process was really long. However, with the introduction of the Aadhaar card, minimal documents are needed, and the time taken for approval of the loan too is reduced.
A personal loan can be availed by individuals mostly for exigency reasons. Thus, they require the verification procedure to be instant, and the loan amount is received by your savings account faster. The major aim of the Aadhaar card is to make the processing of the loan application swift. KYC verification is digitized, and getting loan approval is easy. All details of an individual are found in the Government’s Aadhaar database, which thereby reduces the time taken for loan approval.
Method for using Aadhaar card to apply for loan online
While it is not mandatory at all for you to provide your Aadhaar card, it is way easier to receive a personal loan through it. The procedure is simpler for the bank employees due to easy verification of the Aadhaar details provided by the loan seeker. Also, there are paperless routes wherein documents can be easily submitted online. This process is known as e KYC. In the case of e KYC, you do not need to provide any physical documents. There are distinct banks that even offer instant loans in case the borrower uploads any scanned copy of the Aadhaar card.
Below is a list of NBFCs (Non-Banking Financial Companies) & banks that use the Aadhaar card as major identity proof:
∙ Capital First personal loan
∙ Punjab National Bank personal loan
∙ ICICI personal loan
∙ Indiabulls personal loan
∙ State Bank of India (SBI) personal loan
∙ HDFC personal loan
Conclusion
It has become extremely easy to submit an application for a personal loan since the launch of the Aadhaar card. NBFC and bank verification are even done swiftly since the database of Aadhaar contain info like name, date of birth and permanent address. It, in turn, assists individuals to avail their loan proceeds quickly.
FAQs (frequently asked questions)
∙ Can you get a personal loan on an Aadhaar card?
Yes, an Aadhaar card can be used to apply for a personal loan with NBFC or bank.
∙ Can you apply for a personal loan on your Aadhaar card online?
Yes, one can avail personal loan through an Aadhaar card online.
∙ Is it possible to place an application for a personal loan through an Aadhaar card if you don’t have a PAN card?
Yes, one can apply for a personal loan just through an Aadhaar card if you do not hold a PAN card. However, in these cases, you are required to offer a few other important documents such as a passport, voter ID card, salary slips, driving license and so on. The list of documents is subject to the requirements of a bank or NBFC.
∙ How long does it take for a loan application process when you place an application for a personal loan through an Aadhaar card?
It is generally an instant process because an Aadhaar card contains the biometric details of the loan seeker. Biometrics permits a simpler and faster verification procedure and thus, permits a quicker loan application process.
∙ How long does the loan proceed disbursal takes?
You are required to meet the eligibility criteria for a loan application. The verification procedure in India does not take very long. If you have submitted all your documents and verified them on time, loan proceeds will generally be disbursed in two to three days.
∙ Will you require a co-applicant for a personal loan on application through an Aadhaar card?
Usually, you may not require placing an application for a personal loan along with a co-borrower if your credit score is good, i.e., 750 and above.
Ending note
An aadhaar card loan is a kind of unsecured credit option offered by the bank or NBFC. It requires limited documentation than traditional banks. A personal loan through an Aadhaar card is a paperless e KYC document that matches your loan eligibility criteria for biometric verification. Note that, Aadhaar card can even be used as address or ID proof. You are just required to submit your financial documents like PAN card, salary statements and bank statements for personal loan approval.
Previously, both public and private sector banks demanded several documents from applicants to approve the personal loan application. Thus, the time taken for the loan approval was even longer. However, since the introduction of the Aadhaar card, there has always been less requirement for documents, and the time taken for personal loan approval has been reduced. You can avail of a personal loan for any reason, may it be to meet emergency purposes, medical expenses or for financing education. And with Aadhaar card processing, it has become easier and quicker.
