Aadhaar card loan is similar to any other personal loans, such as marriage loan and loans given to self-employed and salaried individuals as well as pensioners; however, the documentation process differs.
Financial institutions provide unsecured loans upon submission of an Aadhaar card, which acts as a proof of address and proof of identity. Nonetheless, submission of proof of income is a must to obtain such a loan over and above basic eligibility criteria.
Here’s how to obtain an Aadhaar card loan, along with features, eligibility, interest rate, and financial institutions that provide one.
How does Aadhaar Card Loan Work
Every bank and financial institution requires know-your-customer (KYC) documents from applicants when they apply for a loan. Such documents can be voter’s ID card, passport, ration card, etc. However, aadhaar card, which has been linked with a PAN card, are now accepted by most lenders as a proof of address and identity.
Submission of an Aadhaar card is considered as a valid KYC document as it contains details such as name, gender, date of birth, photograph, permanent address as well as unique Aadhaar card number, and biometric details. It acts as a primary document to help lenders complete the loan verification process with the details which the Unique Identification Authority of India (UIDAI) maintains.
Such a loan is helpful to get an instant loan without submission of other documents. Interest rate is added on the principal loan amount when the equated monthly installment (EMI) begins. Remember, you have to submit documents related to proof of income to avail of Aadhaar card personal loan. Some banks may as well ask for a PAN card.
As far as the loan amount is concerned, banks and financial institutions run a thorough credit check. Also, your monthly income, EMI/NMI ratio matter to arrive at the maximum loan amount you can avail.
Here are the documents that may be required as proof of income.
Features and Benefits of Aadhaar Card Loan
Other than documents related to proof of address and identity, features and benefits of personal loans obtained upon Aadhaar card loan are similar with any other personal loans.
Here’s what you need to know.
Applicants
Salaried, Self-employed individuals, and pensioners.
Age
20 to 80 years of age.
Minimum Income
INR 20,000 to INR 25,000 per month.
Loan Amount
INR 10,000 to INR 40 lakh, or above.
Processing Fee
0.5% to 6.5%
Repayment Tenure
1 to 7 years.
Credit Score
600 and above.
Collateral
Nil.
Margin
Nil.
Co-applicant/guarantor
Required in case of pensioners. In this case, a nominee or a guarantor drawing a decent income.
Note: Features and benefits on Aadhaar card loan may differ as per banks and lending institutions.
Lending Institutions that Provide Personal Loan on Aadhaar Card
Notably, there isn’t much difference between Aadhaar card loans and other personal loans. While some banks have started to offer a separate retail loan as “Aadhaar Card Loan”, some banks ask for extra but only one document each as “proof of address” and “proof and identity” — which in this case, Aadhaar card fulfills the requirement.
However, the rate of interest, processing fees and other charges on Aadhaar card loans are similar to personal loans. Here are some of the banks and interest rates they offer on Aadhaar card loans.
Related: Personal Loan Interest Rates In 2023.
The interest rate on Aadhaar card loans is accurate as of April 12, 2023.
How to Apply for an Aadhaar Card Loan Online
The application process to avail of an Aadhaar card personal loan is subject to banks that provide one as well as proof of income. Most banks like mentioned above via its official website offers existing and new customers to get instant Aadhaar card loans online with EMI details as per select repayment tenure.
The Aadhaar loan application process online is self-explanatory. It undergoes a series of verification processes through registered email and OTP authentication by SMS. After submission of a 12-digit Aadhaar card number and proof of income, bank agents get back to you after validation to take forward the loan process. For existing customers, the loan disbursement process may take instantaneously, or within a working day or two.
Frequently Asked Questions (FAQs)
Is an Aadhaar card loan a secured or unsecured loan?
Aadhhar card loan is mostly collateral free, or an unsecured loan. However, depending on the amount you wish to borrow, some banks may require you to pledge security as a collateral on the basis of your income.
Do I have to submit other documents to get an Aadhaar Card loan?
Aadhaar card fulfills the requirement of proof of identity and address. However, you have to submit proof of income to show that you can repay the loan.
I am an unemployed individual, can I get an Aadhaar card loan?
Depending on your relationship with the bank, your cibil score and a proof that you can repay the loan, you may get an Aadhaar card loan even if you are unemployed. A secured loan would be ideal for such individuals.
What is the difference between Aadhaar card loan and other personal loans?
Aadhaar card loan is obtained on the basis of submission of Aadhaar card as proof of address and identity. However, in other types of personal loans, banks will ask borrowers to submit at least one document each as proof of address and proof of identity.
