Personal loans are required for various purposes, both for planned expenses as well as for emergencies. For getting a personal loan in India, one has to present several documents. From income proof to address proof, these are required by the lenders for approving personal loans. The most important document for getting a personal loan in India is the PAN (Permanent Account Number) card. For acquiring any financial product, a PAN card is of utmost importance. Before opening a new account, all banking and non-banking financial institutions ask for a PAN card. Read on to know more about a personal loan on PAN card in India.
Understanding the role of PAN card in acquiring loans
Every individual with a PAN card will have a 10-digit unique identification number. The unique identification number on a PAN card helps in identifying a taxpayer. A lender will use the 10-digit unique identification number to determine whether the applicant is a legal taxpayer or not. In India, a PAN card is a must for acquiring all types of financial products. If someone does not have a PAN card, it is suggested to apply for one right away. A PAN card facilitates the loan approval process for applicants.
A PAN card also serves as a photo ID and address proof while applying for a loan. The lender can also verify the DOB (Date of Birth) of the applicant with the help of the PAN card. A PAN card is used for:
- A PAN card is needed for filing income tax returns in India. PAN is also required for paying other types of taxes in India, like direct taxes.
- A PAN card is needed if someone has to incorporate a business/company in India.
- A PAN card is needed if someone purchases a piece of land worth more than INR 5 lakhs.
- A PAN card is needed to apply for a personal loan in India. Be it a personal loan for education or home renovation, a PAN card is required.
- A PAN card is required for dealing in bonds or shares worth more than INR 50,000.
- A PAN card is needed for the sale and purchase of vehicles in India.
As one can see, a PAN card is needed for numerous financial activities and transactions. Loan providers are strict regarding the requirement of a PAN card for a personal loan. Irrespective of the loan application mode (offline or online), a PAN card is mandatory.
How to apply for a loan against a PAN card in 2024?
Firstly, one needs to understand that the loan amount isn’t decided via the PAN card. A PAN card is a document used by lenders to validate the applicant. Getting a personal loan against a PAN card means using it to apply for a loan. The steps to apply for a personal loan in 2024 using a PAN card are as follows:
- Choose an online lending source to get a loan using your PAN card. It is more convenient than a visit to the office of the lending institution.
- Fill out the personal loan application online with accurate details. The lender will get back to the applicant regarding the approval or rejection of the loan application.
- Once your loan application is completed, the lender will ask for KYC details. The applicant has to offer a PAN card for the KYC verification process. Some other documents will also be requested for the KYC verification process.
- Once the applicant is verified, they can choose the loan amount and the repayment structure. After the lender’s approval, the personal loan amount will be remitted to the applicant’s bank account.
Documents needed besides a PAN card for personal loans
A PAN is mandatory for getting a personal loan but isn’t the only document required. Lenders ask for more documents before offering a personal loan in India. Documents besides a PAN card required for acquiring a personal loan are as follows:
- The lender can ask for an Aadhar card or any other ID proof to process a personal loan.
- Lenders usually ask for salary slips for the past few months to check income stability.
- Some lenders also ask for bank account statements before offering a personal loan.