Applying for a personal loan as a student can be time-consuming and complicated. But, if you’re prepared with all the necessary documents for a personal loan, you can speed up the loan application process.
By understanding what’s required, you can be better prepared to get the money you need. In this blog post, we will go over all the required documents for a personal loan. Knowing what to bring to the table can help simplify the process and increase your chances of getting approved. So keep reading to know more.
How do Personal Loans Work for Students?
When it comes to taking out a personal loan as a student, there are a few things you need to know. For starters, most personal loans are unsecured, which means they don’t require any collateral-a type of personal loan document. However, this also means that the interest rates on unsecured loans are usually higher than those of secured loans.
As for how personal loan works for students, most students will likely need a cosigner to qualify for a personal loan. This is because lenders typically view students as high-risk borrowers due to their lack of credit history.
Required Students’ Documents for Personal Loan
Before applying for a personal loan, you’ll need to gather some important documents. Your lender will more or less need the following documents for a personal loan:
1. KYC Documents
The first and foremost document for personal loan application is your KYC. KYC is also known as the Know Your Customer document. These form the basis of your eligibility assessment and are the first documents to be verified.
If you are applying for a personal loan online, you must upload a scanned copy of your latest Photo Identity Proof, Address Proof, and salary slip (or a bank statement).
If you’re applying for a personal loan offline, make sure you get these documents verified by the concerned authorities:
- Photo Identity Proof: Aadhar Card, PAN Card, Passport, Driving License, Voter ID, etc.
- Address Proof: Aadhar Card, Passport, Driving License, Electricity Bill, etc.
2. Collateral Documents (for secured loans)
There are situations when lenders have doubts about your ability to repay the loan on time. In such a situation, they will ask you to put up collateral. Collateral is a physical asset you put up as a guarantee for your loan. If you fail to pay the loan in time and the lender reclaims your collateral, he will use it to pay it off.
3. Security Documents (for secured loans)
These are the legal documents that protect the collateral. It is a legal claim on your assets that you put up as a guarantee for your loan. If you fail to pay the loan in time, the lender can reclaim the amount from the security.
4. Credit Rating Report Document
Lenders will check your credit rating to assess your ability to repay the loan on time. If your credit rating is low, you might struggle to get a loan.
You can also get a credit rating before applying for a loan by getting a Credit Rating Report from a credit bureau. Ensure you get the report from a reliable and authentic credit bureau like CIBIL or Experian.
5. Co-signer Documents
A co-signer agrees to be responsible for the loan if the primary borrower cannot repay it. The co-signer may be asked to provide a copy of the driving license or other government-issued ID, income proof, and proof of residence.
Tips for Getting your Loan Approved
Follow these tips to get your loan application approved quickly.
1. Be clear and precise about the loan’s purpose. Lenders will be curious about how you intend to use the loan money. Prepare a detailed explanation of how you want to spend the money.
2. Research lenders ahead of time. Some lenders may be more likely to approve personal loans for students than others.
3. Review your credit history and score. Lenders will pull your credit report when considering you for a loan, so it’s important to know what they’ll see ahead of time.
4. Have all required documentation ready. Most lenders will require proof of income, identification, and other financial documents when considering you for a personal loan. Having all the documents for personal loans readily available will help speed up the process.
How to Repay a Personal Loan?
You can make regular monthly or lump sum payments when you have the money available. You can also make interest-only payments, which can help reduce the overall amount of money you owe.
When repaying your loan, make sure your payments are on time. If you miss a payment, you may be charged a late fee, which could impact your credit score.
If you struggle to repay your loan, reach out to your lender as soon as possible. They may be able to offer you some flexibility, or they may be able to help you consolidate your loans.
Student loans are a great way to get the money you need to pay for educational expenses. However, you may need a loan if you need more than what is covered. Personal loans can be used for just about anything – including rent and living expenses.
While the process may seem overwhelming, you can be ready to apply in no time with careful planning and getting your documents for a personal loan ready. You’ll have to submit personal information, financial information, and various documents.
Take some time after your documents for a personal loan have been verified and approved. Make sure you understand all the terms and conditions associated with the loan before signing on the dotted line.
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We have a loan for every need, so you can get the money you need when you need it. Our experts will guide you in every step, including preparing your documents for a personal loan. Apply today.