What are the documents required for a bank loan?

Last Updated at: May 14, 2020

A loan can be defined as an amount that has been borrowed for a certain period of time from another party, and which needs to be paid back with added interest.

In the earlier days, when banks and other such government policies of loans were not set up, people used to borrow money from relatives, friends or acquaintances, with the promise of returning it with some extra interest. And now, years later, the same form of the transaction of money is given the name of the loan, and instead of borrowing from their acquaintances, people now prefer taking it from the bank.

Taking loans from banks is preferred over others because it is a more streamlined and sorted-out process. Also, nowadays, not just one but various types of bank loans are available according to the requirements of the people. Whether it be taking a loan for purchasing a home, setting up your business or pursuing further studies, there are schemes for one and all.

Syndicated Loan

If used properly, these bank loans can help one raise themselves, and if not paid back, and used for unfair means, it can put people into the ocean of debt, making it almost impossible for them to come out of it.

Bank loans are of several types according to the individual as well as business needs, and certain documents need to be submitted and approved before getting the loan finally. The list of types of bank loans and the documents required for each are as follows:

Personal loans

These loans are offered to individuals for their personal use and to fulfil their basic needs such as paying bills, buying television and other such daily requirements. These loans are unsecured and are beneficial if taken in small amounts and repaid as soon as possible. If a large sum of money is taken as a loan, the interest will be equally more.

The documents required to get a personal loan include the following:

Identity proof: Pan card/ Driving license/ Voter ID (any one)

  Residence proof: Utility bills of the past 3 months/ Leave and license agreement/ Passport (any one)

   Salary slip of last 3 months( in case salary is credited)/ Income proof of last 2 years ( for self-employed)

  2 passport size photographs

   Office address proof ( for self-employed)

Proof for business continuity ( for self-employed)

Credit card loans

Being one of the most convenient methods of payment, it is being widely used in general as a loan type. While using a credit card, one must be aware that they need to repay the amount, maybe with some interest or at times zero interest in case of introductory offers.

The documents which need to be submitted for a credit card are different for different categories of individuals, depending on whether they are self-employed, job, or students and others.

Get Your Business Loan

The documents required to apply for a credit card are as follows:

Identity proof: Voter ID/ Pan Card/ Passport ( any one of them)

Address proof

Age proof

Income proof ( if applicable)

Enrollment form (for students)

  Other documents: Pan card photocopy, form 60

Home loans:

Planning to buy a home, it surely leads to spending a hefty amount of money. Well, if you do not have the funds, you can easily get the loan from the banks with the starting rate of 8.30%. But, before getting approved for the above, the individual’s credit score is checked. And, the good part is that if you have a good credit score, there are chances of lower interest rates.

The documents which are required for applying for a home loan are as follows:

  Complete application form for a home loan

Passport size photographs of the individual in whose name the loan is being taken

  Identification proof: Voter ID/ Passport/ Pan card ( any one of them)

   Residence proof: Utility bills ( not older than 3 months)/ Ration card/ Passport/ Others

  Age Proof: Aadhar card/ Pan card/ Marksheet of 10th board/ Birth certificate/ Others

  Income proof documents ( Depending on the type of employment)

Property Documents ( as per the requirements): Include NOC, Occupancy certificate among others.

Education loans:

For the individuals who want to pursue further studies, but do not have enough funds, education loans can be really beneficial. These loans cover all the fees including academic fees, travel costs, etc.

The documents required to get education loans are as follows:

  Documents of KYC

  Identity Proof

 Admission letter from the university/college

  Statement of bank

 Marksheets of 10th, 12th and other higher courses ( if applicable)

   A demand letter from the university/college

  Other documents as per the requirements of the bank

 These are some of the types of loans that are granted by the bank according to the needs of the individual or business. Some other loans include car loans, loans against Fixed deposit amounts, etc. All one needs to get a loan from the bank is a good credit score and the application would be easily approved.

Senior Executive - Content in Vakilsearch