Reasons why Salary slip, ID card & bank statement are important documents required for availing a personal loan

If you are about to apply for a personal loan, your bank or lender will ask for several documents. This submission of documents to a bank or NBFC is a mandatory process known as KYC. KYC stands for Know Your Customer, and it is a basic formality that requires the customer to submit certain identification details for verification purposes. KYC has been introduced to prevent financial fraud and counteract illegal activities. The main objective of KYC is to verify a potential customer’s identity, so as to ensure that they don’t operate under a false or stolen identity.

Until and unless a customer’s KYC documents have been submitted and verified by the institution or NBFC, the customer will not have access to utilize any of the latter’s services. That means that as a borrower, you cannot use a financial service such as payment apps or avail personal loans unless you have completed the KYC process with the NBFC. In India, there are several important documents required for personal loan. Below, we’ll discuss what are the common documents required for personal loans for salaried employees.

Common Documents Required for Personal Loan

Salaried individuals will require to submit usually one KYC document per category with their loan application: 1. One selfie and passport picture 2. Address Proof: Aadhaar card, Passport, Utility Bill, or Ration card 3. Photo Identity Proof: Passport, PAN card, Aadhaar card, Driver’s License, or Voter ID card 4. Salary Proof: Last 3-6 months’ bank statements, salary slips, and Form 16 5. Job Continuity Proof: Employment contract/job offer letter, or letter from HR department

What are the Important Documents Required for Personal Loan?

All lenders have different documents that are required for personal loan, as some may require more documents than others. However, there are a few that you’d want to keep on hand, as they are the most important documents required for personal loan. 1. ID CARD: Company ID card verifies your employment with the organisation you work with. 2. SALARY SLIP: Salary slip shows the break-up of your salary every month and how much is credited to you in hand. 3. BANK STATEMENT: Furnishing your bank statement from the last several months allows the lender to check whether your salary gets credited regularly every month to your bank account. Lenders also check the average monthly balanced that you maintain every month. The higher amount you maintain, the more financial responsibility you have. Lenders also use the bank statement to verify how many liabilities you have.