Importance Of Documentation Before And After Applying For A Loan
Looking for a loan? Here are some of the important documents that you need before and after applying for a loan.
We may not always have enough money to buy what we want, be it for us personally or for something else. Individuals, businesses, firms, and institutions seek money from lenders in such situations. Even if the process is simple, getting a loan sanctioned can be challenging if you lack the necessary documents or have incorrect eligibility requirements. As a result, getting firsthand experience with the documentation needed for any kind of loan is significant.
Why Documents are Important in Loan Process & Reasons for Rejection?
Most loan applications indeed fail the first hurdle. Age, income, bank verifications, and even proof documents that do not meet the lender’s requirements are all reasons for rejection. To remove any chances of loan delay or rejection, keep up with what’s new in the loan sector, do your homework, collect all the necessary documents, and then apply for a loan.
Documents, prerequisites, interest, and processing fees differ according to different lenders, financial companies, and Non-Bank financial companies (NBFCs). The KYC document of a borrower, however, does not change. Know Your Customer (KYC) is a legal requirement that verifies the borrower’s identity. KYC documentation includes:
- PAN Card
- Aadhar Card
- Driving License
- Voter Identity Card
Loans against property, small business loans, and vehicle loans are among the several types of loans accessible to everyone. Knowing how to apply for a loan, what documents to bring, and other requirements will help you get a loan faster without facing many challenges. In this blog we have covered various documentation you will require to get your loan approved without any issues.
Though each lender’s document checklist may differ significantly, let’s look at a typical document checklist for various loan applications:
Vehicle Loan
Planning a new commercial vehicle and want to buy it on EMIs? The documents required for applying for commercial vehicle loans in India are listed below:
- Proof of Identity- PAN card/ Permanent driving license/ Aadhar card/etc.
- Last six months’ bank statement.
- Latest salary slip.
- Passport-size photographs.
- Proof of Residence- Permanent driving license/Voter ID card/Aadhar Card, etc.
Loan Against Property
It is quite simple to apply for a loan against property. All you have to do is make sure your loan application documents are complete and accurate. When applying for a loan against property, here is a list of documents you should keep:
For Salaried Individuals:
- A copy of the duly filled application form with PAN card/ Aadhaar card /Driving License/Voter ID/Passport.
- Address proof (residence and office) – Aadhaar Card/Voter ID or a copy of any utility bill like an electricity bill.
- Salary slips for the latest three months.
- Bank statements for the last six months reflecting salary obtained and current repayments.
- Proof of ownership: Original Property title deed offered as security and other property documents such as Latest maintenance, Water Tax, Municipal Tax, and any other such taxes paid receipt.
- Non-encumbrance letter from Co-operative Society (wherever applicable).
- Permission to create an Equitable Mortgage from Society or Development Authorities. (wherever applicable)
For self-employed individuals:
- A copy of the duly filled application form.
- Identify proof: PAN card/ Aadhaar Card.
- Address proof residence and office as well – Aadhaar Card/Voter ID/ Driving license or a copy of any utility bill like electricity bill.
- Income returns filing of the previous three years.
- Income certificate issued by a recognized authority like Tehsildar/ BDO/ SDO.
- Bank account statements for the last six months.
- Ownership Proof: Original Property title deeds of the property provided as collateral.
- Receipt of payment for the latest water tax, municipal taxes, and other maintenance taxes.
- Non – Encumbrance letter issued by your housing society.
- No objection letter from your housing society for a mortgage.
Conclusion
Understanding various documents required while applying for a loan can really make the process smooth for you. In many cases, people having proper documentation can easily pass through the screening process of loan applications and get them approved without any hurdles. So if you are applying for a loan, keep it in mind.
