Aadhar Card loan: An Aadhar card loan is a type of loan that utilizes the Aadhar card as a primary document for identity verification and processing. The Aadhar card, which is a unique 12-digit identification number issued by the Indian government, simplifies the loan application process by eliminating the need for multiple documents such as address proof and photo identification. This makes the loan application quicker and more efficient.
Aadhar card loans are typically processed faster due to the instant verification of the cardholder’s details, including identity and address. These loans are usually unsecured, meaning they do not require collateral, and are granted based on factors like credit score, income, and repayment capacity. The use of Aadhar ensures seamless and secure lending, allowing for faster disbursement and fewer paperwork requirements.
What are the benefits of taking loan from Aadhar card?
Taking a loan using your Aadhar card offers several advantages. Here are some key benefits:
- Fast Processing and Approval: Since the Aadhar card provides instant verification of identity and address, the loan application process becomes faster. Lenders can quickly assess your eligibility and approve your loan with minimal documentation.
- Minimal Documentation: Aadhar-based loans typically require less paperwork. The Aadhar card serves as proof of identity and address, reducing the need for submitting additional documents like utility bills or photo ID cards.
- Quick Disbursement: With simplified verification processes, loans can be disbursed more quickly, sometimes even within a few hours or days, depending on the lender.
- Access to Instant Loans: Some financial institutions offer instant personal loans or small loans based on Aadhar card details. These loans are often designed to meet urgent financial needs.
- Improved Accessibility: Aadhar-based loans are accessible to a broader population, especially those who might not have access to traditional forms of documentation. This can be particularly helpful for people in rural areas or those who may not have other forms of proof.
- Lower Interest Rates: Some financial institutions may offer lower interest rates on Aadhar-based loans because of the ease and speed of verification, which reduces operational costs for the lender.
- No Collateral Required: Most Aadhar card loans are unsecured loans, meaning you don’t need to pledge any collateral (like property or assets) to qualify for the loan.
- Online and Seamless Process: Many lenders offer Aadhar-based loans through online platforms, making it convenient for applicants to apply, track their loan status, and receive funds directly into their bank accounts without visiting physical branches.
Overall, Aadhar card loans offer convenience, speed, and ease of access, making them a popular choice for many borrowers in India.
Who can take loan from Aadhar Card?
Anyone who meets certain eligibility criteria can take a loan using their Aadhar card. However, the specific eligibility requirements may vary depending on the lender and the type of loan. Below are the general criteria for taking a loan based on your Aadhar card:
1. Indian Citizens:
- The applicant must be an Indian citizen to qualify for a loan based on an Aadhar card, as Aadhar is issued exclusively to Indian residents.
2. Aadhar Card Holder:
- The applicant must possess a valid Aadhar card. This serves as proof of identity, address, and citizenship.
3. Minimum Age Requirement:
- Applicants generally need to be at least 18 years old to apply for a loan. Some lenders may have a higher age requirement, especially for certain types of loans (like personal loans).
4. Valid Bank Account:
- Since the loan is often disbursed directly into a bank account, applicants should have an active bank account in their name. This helps in smooth and direct transactions.
5. Income Criteria:
- Most lenders will assess the applicant’s income to ensure they can repay the loan. While Aadhar card loans may be relatively easier to apply for, lenders still check for income proof or employability.
- Some lenders may also look at the applicant’s credit score to assess their repayment capability.
6. Good Credit History:
- For unsecured loans, a good credit score (usually above 650) is often required. A higher credit score increases the chances of getting approved for the loan and could result in better interest rates.
7. Eligibility Based on Loan Type:
- Different types of Aadhar-based loans, such as personal loans, instant loans, or micro-loans, may have specific eligibility requirements. For instance, small loans may have less stringent requirements compared to larger personal loans.
8. Permanent Residency:
- Some lenders may require applicants to be permanently residing in India, although this is typically a requirement for all loan types.
9. No Pending Debts:
- Lenders may check if the applicant has any outstanding loans or debts. Having an existing loan or pending debts might impact eligibility or loan approval.
10. Compliance with Lender’s Terms:
- The applicant must meet any additional requirements set by the financial institution or lender offering the Aadhar card loan, such as having a stable job or meeting specific loan repayment terms.
If you meet these basic criteria and your lender’s specific requirements, you can apply for a loan using your Aadhar card.
How much loan will be available from Aadhar card and what will be the interest rate?
The amount of loan you can get through your Aadhar card and the interest rate depend on several factors, including the lender’s policies, your credit profile, and the type of loan you’re applying for. Here’s a general idea of what to expect:
1. Loan Amount:
- Personal Loans: Aadhar card-based personal loans can range from ₹10,000 to ₹25 lakhs or more, depending on the lender, the type of loan, and your eligibility (such as credit score, income, and repayment capacity). Some lenders might offer smaller loans for urgent financial needs, typically starting at ₹10,000.
- Micro Loans/Small Loans: Some institutions offer smaller micro-loans or instant loans through Aadhar verification. These loans can be as low as ₹5,000 to ₹50,000, and are typically unsecured, focusing on providing quick financial relief for smaller expenses.
- Home Loans: If you’re applying for a home loan using your Aadhar card, the amount could go up to ₹50 lakhs or more, depending on the property’s value and your financial standing.
- Eligibility Criteria: The actual loan amount you are eligible for depends on factors like your income, credit score, repayment history, and existing debts. A higher credit score and stable income will likely increase your loan eligibility.
2. Interest Rates:
- The interest rate for loans based on Aadhar cards can vary significantly based on the type of loan, the lender, and the applicant’s financial profile. Here’s a breakdown of possible interest rates:
- Personal Loans:
- Interest rates for Aadhar-based personal loans generally range from 10% to 24% per annum. Lenders like banks, NBFCs (Non-Banking Financial Companies), and online lenders offer personal loans with these rates, depending on your creditworthiness.
- Micro Loans:
- For micro-loans or instant loans, the interest rates could be slightly higher, ranging from 15% to 36% annually. These loans are often for smaller amounts, and higher interest is charged due to their unsecured nature and quick disbursement.
- Home Loans:
- If you are applying for a home loan based on Aadhar, the interest rate would be lower compared to personal loans. Typically, 7% to 10% per annum is charged for home loans, depending on the lender and your eligibility.
- Secured vs. Unsecured Loans: If the loan is unsecured (like a personal loan), the interest rate may be higher because there’s no collateral. Secured loans (like home loans) may have lower interest rates due to the collateral backing.
3. Other Factors Influencing Interest Rates:
- Credit Score: A higher credit score (750 or above) can help you secure a loan at a lower interest rate. Lenders view you as less risky.
- Income: A stable income can help reduce the interest rate, as it shows you have the ability to repay the loan.
- Loan Term: Loans with shorter repayment terms may have higher monthly EMIs but could attract lower interest rates. On the other hand, longer loan terms could carry slightly higher rates due to the extended repayment period.
- Lender: Different lenders may offer different rates, and comparing offers can help you secure the best rate.
4. Processing Fees and Other Charges:
- In addition to the interest rate, there could be processing fees or other charges associated with Aadhar card loans. These fees are generally a percentage of the loan amount, typically ranging from 1% to 3%.
How to apply loan through Aadhar card
Applying for a loan using your Aadhar card is a relatively straightforward process, and it can be done both online and offline. Below is a step-by-step guide on how to apply for a loan through your Aadhar card:
Steps to Apply for a Loan Using Aadhar Card
1. Check Eligibility
- Before applying for a loan, ensure that you meet the eligibility criteria set by the lender. Typically, this includes:
- Being an Indian citizen.
- Having a valid Aadhar card.
- Meeting the minimum age requirement (usually 18 years or older).
- Having a stable income and good credit score (for unsecured loans).
- Having an active bank account.
2. Select the Loan Type
- Personal Loan: Unsecured loans for various personal needs.
- Micro Loans: Small loans for urgent needs.
- Home Loan: If you are looking to buy or construct a home.
- Car Loan: For purchasing a car, etc.
3. Choose a Lender
- Identify the financial institution or lender from whom you want to take the loan. You can choose from:
- Banks (State Bank of India, HDFC, ICICI, etc.)
- NBFCs (Non-Banking Financial Companies) like Bajaj Finserv, Tata Capital, etc.
- Online lenders and digital platforms that offer quick loans.
- Online loan applications are now very common, and many lenders allow you to apply directly through their websites or apps.
4. Visit the Lender’s Website or Branch
- Online Application: If you choose to apply online, visit the lender’s official website or download their mobile app.
- Offline Application: If you prefer applying in person, visit the nearest branch of your chosen lender with the required documents.
5. Fill in the Loan Application Form
- Online: Fill out the application form on the lender’s website or app. You’ll need to provide personal details, employment/income information, and loan-related details (loan amount, tenure, etc.).
- Offline: In case of offline applications, the bank/loan officer will provide you with a form to fill in your details.
6. Submit Documents
The lender will require a few essential documents for processing the loan, including your Aadhar card. Commonly required documents include:
- Aadhar card (as proof of identity and address).
- PAN card (for tax identification).
- Passport-size photograph.
- Proof of income (e.g., salary slips, bank statements, ITR).
- Employment details (if applicable).
- Bank statements (for income verification).
- Other documents as per lender’s requirements.
7. Aadhar-based Verification
- Lenders will use your Aadhar card to verify your identity, address, and sometimes your bank account details via the Aadhar eKYC process.
- This process is generally quick, and you might not need to submit physical copies of certain documents (like address proof or photo ID), as the Aadhar card will serve as the verification.
8. Loan Processing and Approval
- After submitting your application and documents, the lender will process your request. The lender may:
- Verify your details (via Aadhar and other documents).
- Check your credit score and income to determine your loan eligibility.
- The lender will then decide whether to approve or reject your loan application.
- If approved, you will be informed of the loan amount, tenure, interest rate, and repayment schedule.
9. Loan Agreement and Disbursement
- After approval, the lender will send you a loan agreement that includes the loan amount, interest rate, tenure, and repayment terms.
- Once you accept the agreement and sign it (digitally or physically), the loan amount will be disbursed to your bank account. In many cases, the loan amount can be credited within hours (especially for smaller, instant loans).
10. Repayment of Loan
- Repayment of the loan will typically be made in EMIs (Equated Monthly Installments), which will be automatically deducted from your bank account if you’ve set up an auto-debit feature.
Online Application Process (for Aadhar-based Loans)
- Choose an online lender like PaySense, MoneyView, or banks that offer digital loan applications.
- Go to the website or download the app of the lender.
- Fill in your personal details and the loan amount you require.
- Upload necessary documents (Aadhar card, PAN card, proof of income, etc.).
- The lender will process your application, perform Aadhar-based eKYC verification, and check your creditworthiness.
- If your loan is approved, the money is typically disbursed directly into your bank account.
Conclusion
Applying for a loan using your Aadhar card is simple, as it streamlines the verification process. You can apply for loans online or offline, with minimal documentation required. Ensure that you meet the eligibility criteria, choose the right lender, and follow the application steps. With a good credit score and stable income, you can easily qualify for Aadhar-based loans, which often have faster processing and approval times.
