Personal loans are the first port of call during financial emergencies because they are approved quickly. Aadhaar is an important document for identity and address verification and is used to avail services, including personal loans. Here is a comprehensive guide on how to get a personal loan using your Aadhaar card.

Features of Aadhaar-Based Personal Loans

  • Collateral-Free Loans: Most of the banks and NBFCs provide personal loans without asking for collateral or mortgage.
  • Less Paperwork: Aadhaar-based loans make it easier to get loans as documentation is reduced to the minimum.
  • Rapid Sanction: Loans get sanctioned sooner since Aadhaar provides digital identification, address proof, and income proof.
  • Facilities for Lower-Income Applicants: Banks and other financial institutes offer these loans to people having a low income or fewer documents related to finances.

Eligibility Criteria

  • Age Limit: The applicant is usually between 21 and 58 years, though NBFCs go till 60-65 years.
  • Income:
    • The income varies with banks. For instance, ₹15,000 to ₹25,000 per month would usually be enough for income.
    • The NBFCs are more lenient towards income.
  • Credit Score: At least, the credit score of around 700 is required in most cases. The lower the score, the less is the interest rate.
  • Employment Status: Both salaried and self-employed individuals earning regular income can apply for these loans.

Documents Required

  • Identity Proof: Aadhaar card, passport, voter ID, PAN card, or driving license.
  • Income Proof:
    • ​Salaried Employees: Salary slips, Form-16, and bank account statements.
    • Self-Employed Individuals: GST registration certificate, profit and loss statement, balance sheet, and bank statements.
  • KYC Completion: Mobile number should be linked with Aadhaar for OTP-based verification.

How to Apply for Aadhaar-Based Personal Loans

  • Download the lender's website or mobile app offering Aadhaar-based personal loans.
  • Check your loan eligibility.
  • Upload the required documents digitally.
  • Complete the KYC process using Aadhaar OTP.
  • Submit the application. Approval usually takes 24-48 hours, and the funds are credited to your account.

Loan Amount and Interest Rates

  • Loan Amount:​
    • Banks offer loans ranging from ₹50,000 to ₹5,00,000.
    • NBFCs start from ₹25,000 and may extend higher limits for existing customers.
  • Interest Rates:
    • ​Annual rates can go up to 12.7%.
    • Processing fees are up to 5%.
  • Loan Tenure: It can be opted for 1 to 5 years.
  • Penalties: In case of missing installments, penalties of up to ₹500 can be charged, but there is no prepayment fee.