The role of the Aadhaar card in the world of finance has become increasingly significant. It streamlines the loan application process, cutting down on the paperwork that once made this a lengthy ordeal. Now, loan approval is quicker, making financial help more accessible when you need it.
The process to get a loan with an Aadhar card is simple: first, check if you’re eligible with the bank of your choice. Then, fill in an online form, complete your KYC using your Aadhaar card, and wait for the bank to give the green light. Once your loan is approved, the amount is transferred straight into your account.
What is an Aadhaar Card Personal Loan?
What exactly is a loan based on an Aadhaar card? It’s a personal loan that relies on your Aadhaar card – a unique ID given by the Indian government – to make things easier. This loan process is mostly online and requires minimal paperwork, mainly your e-KYC (Electronic Know Your Customer) details. The Aadhaar card is a multi-purpose tool here: it’s your identity, address, age, and citizenship proof all rolled into one, simplifying various checks into a single step.
Eligibility Criteria for an Aadhaar Loan
To be eligible for an Aadhar loan, applicants must meet certain criteria that demonstrate financial reliability and the ability to repay:
- Residency and Citizenship: This loan is available exclusively to Indian citizens who are residents, setting a specific geographic limit.
- Age Requirements: Applicants between 20 and 60 years are welcome. This range includes young adults starting their careers and older individuals planning for the future.
- Aadhaar Card Mandate: Owning a valid Aadhaar Card issued by UIDAI is crucial. This reflects the government’s effort to simplify financial dealings and identity checks.
- Income and Employment: Both self-employed and salaried people can apply as long as they earn at least ₹20,000 monthly. This ensures a reliable income for loan repayment.
- Credit Health: A minimum credit score of 600 is essential, highlighting the need for a solid credit history to establish financial credibility.
Interest Rates and Charges
Interest rates for personal loans using Aadhaar and PAN cards are often reasonable, starting at 1.33% monthly. However, it’s important to consider other fees:
- Processing Fees: These vary from 2% to 8% of the loan’s sanctioned amount, typically deducted upfront.
- Additional Charges: Fees for cheque bounces and late EMI payments are common. They are usually around 2% of the overdue amount per month.
Being aware of these charges is vital for anyone thinking about taking out this loan.
Essential Documents for Obtaining an Aadhaar Card Loan
For those with a Salary:
- Identity Verification: A PAN Card is essential. If there are issues, like poor quality, other valid forms like Aadhaar Card, Passport, Voter ID, or Driver’s Licence may be acceptable.
- Proof of Residence: You need one document. You could use an Aadhaar Card, Passport, Voter ID, Driver’s License, or recent bills for utilities like electricity, water, or gas.
- Evidence of Income: Banks will ask for 3 months’ of statements showing your salary, usually in a PDF format.
For the Self-Employed:
- Proving Your Identity: The requirements are similar to those for salaried individuals. The primary document is a PAN Card, but Aadhaar Card, Passport, Voter ID, or Driver’s License also work.
- Address Confirmation: The choices are identical to those for salaried people, encompassing Aadhaar Card, Passport, Voter ID, Driver’s License, or utility bills.
- Income Verification: You’ll need bank statements from the past 3 months that reflect your business transactions.
Additional Information:
- The OKYC (Online Know Your Customer) process can simplify the document submission. If you complete it online, it reduces the paperwork needed.
- The entire aadhar card loan application can be handled online for added convenience. Just make sure every document you upload is clear and readable to prevent any hold-ups in your application process.
Benefits of Aadhaar Card Loan
Opting for an Aadhar card loan offers several key advantages:
- Simplified Application Process: The application process for these loans is streamlined and user-friendly, minimising the bureaucratic red tape often associated with loan applications.
- Quick Approval and Disbursal: The efficient verification process allows for swift approval and disbursement of funds, making these loans particularly useful in emergency situations.
- Minimal Paperwork: The need for extensive documentation is significantly reduced, thanks to the comprehensive nature of the Aadhaar card.
- Competitive Rates: These loans typically come with competitive interest rates, making them financially attractive options.
- No Collateral Requirement: Being unsecured loans, they do not require collateral, which broadens their accessibility to a wider range of borrowers.
- Flexibility for All Individuals: They are available to a diverse group of applicants, including salaried, self-employed, and senior citizens.
- Flexible Repayment Tenures: Borrowers can choose from a range of repayment periods, usually between 1 and 7 years.
- Varied Loan Amounts: The maximum loan amount available varies between lenders, offering flexibility in the amount borrowed.
How to Apply for an Aadhaar Card Loan?
To apply for an Aadhaar card personal loan, follow these steps:
- Lender Research: Visit the websites of potential banks or download their Aadhar card loan apps to explore your options.
- Registration: If using a loan app, register with your mobile number.
- Online Application: Navigate to the ‘Personal Finance’ section on the website or app and click on ‘Apply Now’.
- Enter Details: Fill in your personal information and Aadhaar card details accurately.
- Specify Loan Requirements: Enter the desired loan amount and choose a suitable repayment tenure.
- Submit Application: Complete and submit the application form.
- Await Verification: A representative will contact you for verification. Post-verification, if you are deemed eligible, the loan disbursement process will commence, typically within 1 to 2 days for existing customers.
Also Read More About How to Apply for Aadhaar Card?
Conclusion
The Aadhaar card has truly become the key element of India’s digital framework, making it easier for people to manage their financial needs. Whether for personal or business purposes, the Aadhaar card loan in India is a straightforward and accessible financial option for many, standing out due to its easy application process, fast approval times, limited paperwork, favourable interest rates, and no need for collateral.
Related Calculators
| EMI Calculator | SBI EMI Calculator |
| Personal Loan EMI Calculator | HDFC Loan EMI Calculator |
| Interest Rate Calculator | SBI Personal Loan EMI Calculator |
FAQs
Is it Possible to Get a Personal Loan Using My Aadhaar Card?
Absolutely! Your Aadhaar card can be a valuable tool for securing a personal loan. This is particularly handy if you don’t have other common forms of ID. Keep in mind, though, that the loan details, like the amount, interest rates, and repayment terms, can differ from one lender to another.
How Much Interest Should I Expect for a ₹50,000 Loan via Aadhaar?
The interest rate for a loan of ₹50,000 can change based on several factors, including the nature of the loan, your own credit score, the lender’s policies, and the loan duration. These rates also fluctuate with market trends and financial policies.
Can Someone with a Low Credit Score Obtain an Aadhaar Card Loan?
Although a high credit score is often preferred, certain lenders may consider giving loans to those with lower scores under specific circumstances. It’s a good idea to ask lenders directly about their policies regarding credit scores.
Do I Need Another Person to Co-sign When Applying for an Aadhaar Card Loan?
In most cases, getting a personal loan with your Aadhaar card doesn’t require a co-applicant.
Are There Any Extra Fees or Hidden Costs in Aadhaar Card Loans?
Like most personal loans, those taken with an Aadhaar card might include processing fees and other additional charges. These fees can vary depending on the lender. It’s crucial to thoroughly go over the terms of the loan before you agree to anything.
