Before extending a loan to the customer, the loan application passes through various stages, which are:
a. Collection of all required documents from the customer. In the first place, the lender verifies the authenticity of documents.
b. Check past repayment behaviour in his/her credit report.
c. Visit office or residence or both. It is known as CPV, PD or PV in the lending industry.
d. Confirm customer phone number through calling random times in a day.
e. Use other credit policy parameters (age, residential area, geographical limit) & loan eligibility calculator to arrive on the final loan amount.
f. Final decision (approval or rejection).
g. Approval is followed by disbursement.
Loan Document Checklist
Now, you have understood the whole loan process, let’s focus on the list of the document which you need to submit to get a loan for yourself:
1. PAN card.
2. Identity Proof
a. Voter ID
b. Pensioner Photo Card
c. Bank Passbook with Photograph
d. Government official Identity Cards
(For detailed list: https://en.wikipedia.org/wiki/Identity_documents_of_India)
3. Residence Proof
a. Water Bill
b. Electricity bill
c. Telephone bill
d. Rental Agreement or Lease Agreement
(For detailed list: https://legaldesk.com/general/address-proof-documents)
*If you have submitted a document, which contains both photo and address (such as passport, Aadhar Card, Driving License etc) then you have to submit only one document instead of two.
4. Banking records
a. Bank Pass Book
b. Bank Statements
*A lender will ask only one photocopy of above document.
5. Income proof
a. For Salaried: Salary slip, Salary certificate, Form 16 or IT Returns.
b. For Self Employed: Balance Sheet, Profit & Loss Account or IT Returns etc.
* If customer salary is credited to the bank account, then sometimes lender can waive the requirement of income document.
6. Employment/Existence Proof
a. For Salaried: Appointment Letter, Increment Letter etc.
b. For Self Employed: RBI/SEBI Registration Certificate, Shop & Establishment Certificate/Trade License, Letter of Registration for CST/VAT/Service Tax etc.
Depending upon the type of loan applied, the financier can ask for more documents. Here is the list of some popular loan documents:
a. Home loan: Photocopy of Title Documents of the Property & Approved Plan.
b. New Car Loan: Price quotation from the dealer.
c. Used Car Loan: Registration copy of the vehicle.
d. Loan Against Property: Title Deeds including the previous chain of the property documents and Proof of no encumbrances on the property.
e. Education Loan: College Offer Letter & Fee Structure, Marksheet & Degree Certificates.
f. Loan Against Securities: https://www.capitaworld.com/loan-against-property/
g. NRI Loans: Full passport copy and work visa copy, Appointment letter or contract copy & Overseas address proof e.g. utility bill, card statement, House lease agreement, bank statement etc.
Documentation is a critical part of the loan approval process, which is why every loan borrower must ensure that all relevant documents must be submitted in the prescribed manner
Hope this article has resolved most of your query. If you have any query related to loans, then you can get free consultation here.