Importance of PAN Card while applying for Personal LoanA personal loan is an unsecured loan, offered with minimal documentation. Genuine financial institutions and NBFCs mandatorily ask for a PAN Card for approval of an instant loan. Therefore, PAN cards and Aadhar cards are essential documents for the citizens of India applying for a personal loan.
An Aadhaar card fulfils your eligibility criteria for biometric verification, whereas a Pan card verifies the financial and taxation activity of a borrower. So, do keep handy your Aadhar card and PAN card while initiating a personal loan application process.
Advantages and uses of PAN card while applying for Personal LoanA personal loan supports various financial requirements like home renovation, vacation, buying home appliances, medical bills, debt consolidation, and many other purposes.
Hence you need a PAN card, which is a critical KYC document for a personal loan.
With an increasing number of fraudulent borrowers, submission of PAN cards is made mandatory to check the financial history of the borrower, to see if bad debts, bankruptcy, or blacklist status exists or not. So, let's have a look at some of the main features of a PAN card:
Identity Proof - PAN Card is an essential identity proof with a full name and a picture of the borrower. If you have applied for a new Aadhar card and it is under process, financial institutions accept PAN cards also as identity proof. It is not a substitute for an Aadhar card but an equally important identity proof for a personal loan.
Financial History - The PAN gives an overview of the borrower’s financial behavior and gives clarity to the lender whether to approve the loan or not. Overall, a PAN card reflects the creditworthiness of a borrower.
Check CIBIL score - Visit the official CIBIL website to know your credit score. Enter the PAN card number and submit your request for a CIBIL score.
Income tax filing - All individuals salaried or self–employed eligible for income tax are expected to file their IT returns. The IT department has necessitated linking your bank account with PAN Card, as your income tax returns will be directly credited into your said account.
Opening a bank account - PAN card is considered the most vital document for opening a bank account to open savings or current accounts.
Foreign travel - Cash transactions related to foreign travel of more than Rs.50,000/- inclusive of forex purchase require PAN card details.
For claiming an income tax refund - Sometimes the TDS deducted from the taxpayer's income exceeds the actual tax they are expected to pay. To cite the excess tax paid, the taxpayer must have a PAN associated with their bank account.
But, availing of a personal loan without a PAN card can be a task, as lenders use it to keep a track of your financial behavior and an alert against monetary fraud.