Financial obligations might be difficult to satisfy if the cost of living rises and income stagnates. Taking out a loan is a quick way to satisfy any financial need, and while it may appear easy, the reality that NBFCs and banks both provide many products for multiple purposes can be confusing to borrowers. We get to know about specific products that serve certain demands, but nearly all of what we need is generic, meaning it doesn’t necessitate a specific product. A loan for personal use, with its “jack of all trades” type, is the most realistic alternative in such instances.
Taking out a personal loan is an important financial decision that deserves our full attention. Although we may feel that a personal loan is an ideal solution to all our issues, there are a few things to remember.
A personal loan may serve as an excellent way to address a specific financial crisis, but it is important to consider the benefits and drawbacks to achieve the best outcomes.
Whenever it comes to dealing with monetary crises, personal loans can be beneficial. Although it previously took a prolonged period to evaluate and approve personal loans, the procedure has now been eased. Aadhaar cards have made it easier to obtain a personal loan by requiring fewer papers.
Based on the e-KYC infrastructure, the registration procedure for the Aadhaar card loan may be conducted online, with no in-person paperwork necessary, reducing waiting time throughout the process.
How can you request a personal loan by making use of Aadhaar?
Thanks to the implementation of digitization and the adoption of Aadhaar cards, requesting a personal loan digitally is now considerably simpler. All you have to do is give your Aadhaar identification card as KYC verification, and almost all lenders will authorize an Aadhar-based loan for you.
The objectives behind the Aadhar-based loans
- Aadhaar-based personal loans are primarily designed to promote financial empowerment.
- These offer credit to those who might not carry regular identity proof.
- They strive to give emergency credit to consumers.
- They attempt to improve and speed up the loan approval and sanction procedure.
- These loans also aim to promote digitization. The majority of Aadhaar card-based loans involve an electronic application as well as digital transfers and reimbursement systems.
Key Benefits of Making an Application for an Aadhar-Based Loan
Getting approved for a personal loan with an Aadhaar card aims to make the application procedure much easier.
Listed below are the primary benefits of signing up for a card containing an Aadhaar number:
- You can easily acquire several types of loans by supplying your Aadhaar card and a couple of additional KYC documents. This is why your Aadhaar card serves as legal documentation of your birth date, identity, and citizenship.
- Individuals seek personal financing to address monetary crises. Therefore, it makes excellent sense that the procedure for verification be swift and the funds be transferred to the applicant’s banking account as soon as possible. Aadhaar speeds up the loan confirmation and authorization process.
- Because the borrower’s details have been identified in the Aadhar record-keeping system, the time required for approval for loans is significantly reduced.
- The availability of an Aadhaar card assists in making the e-KYC online verification procedure extremely straightforward.
Asking for personal loans with your Aadhar card is uncomplicated. Simply go to the web platforms of various financial institutions, compare their offerings, ascertain whether they accept lending for Aadhar cards, and select the option that most effectively meets the demands of your pocket. When you request financial assistance, and it is granted, the funds will be sent to the account you use for banking. A loan for personal use can help you handle a wide range of money-related challenges, including covering wedding costs, medical expenditures, continuing your education, home renovations, and a lot more.
So, let’s have a look at the lenders providing Aadhaar-based personal Loans
| Lender | Rate of Interest | Processing Fee |
Hero Fincorp Personal Loan | 11% Onwards | 1-3% |
Money View Personal Loan | 16% Onwards | 1-4% |
Faircent Personal Loan | 25% Onwards | 6-8% |
Stashfin Personal Loan | Each time 2% flat for withdrawal |
Taking a loan with the support of your Aadhaar card has transformed the loan-taking journey by providing simplicity, quickness, and transparency. With simpler procedures, reasonable rates of interest, and a diverse selection of lending alternatives, using your Aadhaar card will help you fulfil your monetary needs and objectives more simply.
But despite its positive aspects, there are a few drawbacks as well.
Let’s have a look on all the positive aspects and the drawbacks.
| PROS | CONS |
| A loan for personal use is likely the best option for financing our aspirations, with financial institutions providing them for any valid purpose. Nearly all other loan options are inflexible when it comes to the usage of funds; however, a personal loan can be used for whatever they want. | Usually, financial institutions (NBFCs) and banks charge a fee for processing loans, which is a percentage of the borrowed sum. This price is often higher than that payable for a loan with collateral, implying that the person applying receives a lesser amount than asked. |
| Banks and NBFCs can help you get a personal loan quickly. It is feasible to finish all processes and have the funding granted in a single day (or even hours in some situations), as long as all of the documentation is in place. | Personal loans have higher interest rates because they are unsecured. Average rates of interest range from 12 to 20% per year, which is about 2–3 percent greater than comparable loans. |
| Security or collateral may represent a hassle to deal with when it comes to getting a loan. Most financial institutions want security before lending money, which may make the process complicated and time-consuming. In contrast, most personal loans do not demand collateral or security. | Whereas borrowers can choose their payback period, most financial institutions do not allow alterations once they have picked one. |
| Almost all lenders maintain an easy-to-understand procedure, especially when it concerns paperwork, attempting to limit it to a minimum. This helps to make it simpler for consumers to receive loans, as they typically need to show basic confirmation of identity. | |
| The process of personal loan payback is simple since applicants can select a payback term that meets their objectives. Terms normally range from one to five years, with the person who borrows making the final decisions. |
Bottom Line
Aadhaar-based personal loans can be secured when you present your Aadhaar card as the main proof of identity. It enables people to obtain loans for personal expenses, including medical emergencies, higher education, travel, or consolidation of debt, without demanding lengthy paperwork or verification in person.
Creditors accept your Aadhaar card as accurate evidence for personal information and residential address proof, making the financing approval procedure easier.