How to Get a Personal Loan with Pan Card

Since PAN is an identifier issued by the government, it provides some level of validity and removes any level of questioning the authenticity of identity in the event of identity theft. If you do not possess a PAN card, expect further delay in the loan process or, it potentially being rejected altogether. Having an active PAN linked to your financial instruments facilitates KYC (know your customer) norms to be completed in a timely, cooperative, and accurate manner. 

Features of a Personal Loan Using a PAN Card

The following are the key features of using PAN card for getting a personal loan:  

1. Immediate Identity Verification: A PAN card is a government-approved ID indicating a government-approved verification of your identity, which requires no additional documentation for identity checking. 

1. Instant Access to Digital Credit Check: Your PAN allows lenders to digitally access your credit score and your credit history, thereby greatly shortening the approval cycle from credit applications to disbursement. 

1. An End-to-End Digital Process: Most lenders digitise the entire personal loan process from application to disbursement, which often allows loans to proceed from application to disbursement within a few hours. 

1. No Collateral Required: Since these are unsecured loans, no personal or commercial assets need to be pledged as collateral for the loan. 

1. Flexible Loan Amounts and Periods: Depending on your credit profile, the loans will offer a variety of loan amounts (from very small amounts to very large amounts) and loan repayment periods (from a few months to years) with the options. 

1. Standardised process across Institutions: Since PAN is the reporting agent, it standardises the process across different institutions and different loans.  

1. Eligible for Pre-approved Loans: Based on your past behaviour regarding financial obligations connected to your PAN, you can instantly receive personalised fund/loan operative offers with little to no other documentation. 

Benefits of a Personal Loan Using a PAN Card

Advantages of Obtaining a Personal Loan Using a PAN Card are as follows:  

1. Expedited Approval: With PAN verification, loans can often be dispersed to your account in less than 24 hours. 

1. Fewer Approval Steps: Your PAN card usually will help verify your identity and set up a financial history, which reduces the need to provide multiple hard proofs. 

1. Utility in Case of Emergencies: Personal loans disbursed via a PAN card can be approved quickly, and disbursement is very convenient for emergencies like medical needs, travel, or emergency repairs. 

1. Pre-Approved Offers: If your PAN is linked to a good credit history, lenders can issue personal loans and offers with lower rates, higher loans, and no longer repayment terms. 

1. Financial Planning: Repayment of a personal loan through the PAN system on time or before can help improve your credit score, which can help you qualify for credit in the future. 

1. Transparent Process: The PAN card system allows lenders to connect to financial activities, which removes the subjectivity of the process and makes the personal loan assessment fair and transparent. 

1. Safe and Secure: Using the PAN authentication system to disburse a personal loan discounts the opportunity for identity theft, providing peace of mind in borrowing for those in need. 

Factors that Influence Loan Approval with PAN Card

A variety of factors are evaluated in directing the outcome of your personal loan application even when applying with your PAN card. Factors impacting the outcome of your personal loan application include: 

1. Credit Score: The most important of these factors is your credit score, which is typically derived from bureaus like CIBIL, with lenders generally preferring applicants in the upper range above 750 and accepting applicants with scores above 600, but as with other parameters you may fall outside this threshold. 

1. Income: The level of your monthly take-home income will determine both your eligibility for a loan and whether the monthly repayments represent an out-going you can comfortably afford. 

1. Employment type: Lenders want to understand not only whether you are salaried or self-employed but also how long your employment has continued. Longer periods of employment with the same company often suggest a higher chance of application approval. 

1. Existing liabilities: How much of your monthly income is already accounted for with respect to EMIs reflected in your debt-to-income ratio will also play a big part in the lender's decision.  

1. City of residency: Many lenders apply for tier-based city classifications which have minimum income requirements. 

Note: Each of these metrics will be verified or matched against your PAN, which is a significant tool employed by lenders for automated risk assessment. 

Eligibility Criteria

Having a PAN card with your identity and financial history suitably linked makes you even more likely to meet the important eligibility criteria. Although specific criteria differ between lenders, the majority of lending institutions follow similar eligibility criteria when considering personal loans that can be availed using a PAN card.  

Standard eligibility criteria include: 

1. Nationality: Must be a resident Indian. 

1. Age: Lenders will often accept applicants who are usually 21 years and up to 80 years of age, depending on the end of the loan tenure.  

1. Employment status: Both salaried individuals and self-employed individuals can apply provided they exhibit some consistency of income. 

1. Minimum income: Often these limitations are based on the tier of the city in which the individual resides. For example, an income of Rs.15,000 may be acceptable to a lender if the applicant resides in a metro centre, while if they reside in a less populated city, then a minimum income of Rs.10,000 may be acceptable. 

1. Credit score: Most lenders require a minimum CIBIL score based on the recommendations of 600 or more, but the higher the score, the better chance of approval.  

Documents Required

While PAN card is the primary document, lenders will typically require a few additional documents in their verification process. These are commonly: 

1. PAN card: It is necessary for identity and financial record checks. 

1. Proof of address: Aadhaar card, passport, utility bills (electricity, gas, etc) or voter ID. 

1. Proof of income: Latest three months' salary slips, or bank statements. Self-employed applicants must submit income tax returns or audited financials. 

1. Photographs: Two recent passport-size photographs. 

1. Other KYC documents: depending on the lender, they may ask for your driving licence, ration card, pension order, or receipt of municipal tax.  

Note: Digital files are often accepted, particularly for pre-approved clients. 

How to Apply for a Personal Loan with your PAN card

Applying for a personal loan with your PAN card is a simple process that can be done online or offline. 

Online Process 

1. Step 1: Go to the lender's official website or application.  

1. Step 2: Enter your basic personal information to apply. You have to provide your full name, PAN number, type of employment, monthly salary, and contact information.  

1. Step 3: Upload scanned copies of required documents such as PAN card, address proof, income documents, etc. 

1. Step 4: Submit and wait for your application to be verified. In a lot of cases, the system will conduct PAN-based credit eligibility checks within similar time frames to uploading. 

1. Step 5: Receive approval and disbursal. You will be able to access the funds in your bank account (if eligible) within a few hours of the day. 

Offline Process 

1. Step 1: Go to the nearest branch of the financial institution you have chosen to get a personal loan. 

1. Step 2: Request and fill out the application form.  

1. Step 3: Attach photocopies of relevant documents requested; your PAN Card is a must.  

1. Step 4: You can submit your application to any representative at the bank for processing. 

1. Step 5: Then you will await verification, approval, and disbursal which could take a few business days. 

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