If you are planning to Apply For a Loan, you first need to compare among all the financial institutions that are offering a loan. This will help you to find a good lender with the lowest interest rate. Interest rate should be the prime factor to choose a lender because even a slight difference in the percentage will bring a huge impact on your interest amount.

There are two type of finance for Individual Borrowers and for Businesses. Both have different Eligibility criteria.

There are list of Document for Loan Eligibility :

For Individual Borrowers

• Monthly salary atleast Rs. 20,000. NO CASH SALARY.
• You should be an Indian national, 18 to 60 years of old.
• You should have a PAN Card.
• You should have an active bank account.
• You should have an identity proof and a residence proof.
• You should have a valid income proof .
• You are needed to submit necessary documents as required

For Businesses

• Minimum Bank Credit of Rs. 5 Lac in the last 12 months.
• Public Company/Partnership/Proprietorship/Private company or OPC.
• Company PAN Card required.
• Company should have an active bank account.
• Certification of Incorporation and a valid registered office proof.
• You should have a valid income proof.
• You are needed to submit necessary documents as required

Factors affecting loan approval and loan amount

Employment Stability

This is a very crucial aspect of the financing application process. You need to be salaried and employed for at least 2 years in the current position. If you are self-employed, you need to show a minimum of 5 years of total earnings, before your sanction can be processed.

Age Factor

The younger you are, more the probability of getting a loan. Most banks offer loans to salaried employees between the ages of 20 to 60 years. For self-employed applicants, the age criteria are between 24 to 65 years.

Credit Rating

Your personal credit rating has a lot of importance. A good rating increases the chances of getting a loan with favourable EMIs, tenures and interest rates. A credit rating is a score that is assigned by credit bureaus like CIBIL in India. Hence it is also known as your CIBIL score.

A CIBIL score is a number that indicates your credit worthiness and repayment capacity. It plays a major role when banks decide whether a personal loan application has to be approved or not. CIBIL receives a whole lot of information from banks and other financial institutions about your financial behaviour and aggregates all this information to produce a score that indicates your dependability.

Employer

Your credibility as a borrower automatically increases if your employer has a high reputation and an impressive turnover. Being a part of a well-known company works as an asset and in your favour while seeking a loan.

Financial Stability

Not only is the applicant’s current employable status taken into consideration, past records are most definitely looked into. Previous loans taken, how have they been paid off, credit card maintenance, credit reports, CIBIL scores, etc. are some of the areas that will bear scrutiny. Even if you have a low or a bad CIBIL score, you could pass muster with the following factors.

• Prove that you have a good income and can easily repay your outstanding.
• Show the banks or financial institutions that you are a regular tax payer. You might have to show proof
that you have paid your taxes regularly for the past 3 years.
• To show proof of your gainful employment, show your salary statements of the last 6 months.
• You might also have to show your bank statements and other documents of the last 6 months to a year, such
as your identity proof, address proof, PAN Card and Aadhaar Card.
• Maintain a good relationship with your bank manager, who might have discretionary rights to alter lending
requirements.

India is poised for a paperless finance revolution.

We are at an inflection point in the Indian e-commerce industry in India. Thanks to “Regulatory Encouragements to Paperless Finance” and with the availability of technology that allows for a seamless mobile experience, buying financial productions online, be it fixed deposits, credit cards, insurance products, loans or mutual funds, will be as easy as buying a mobile phone online.

 

Social and financial inclusion

 

The keys to buying paperless products are e-KYC, which instantly authenticates a customer’s credentials via the Aadhar servers, and the e-signing of application documents, which allows customers to digitally sign documents without having an offline interaction with a branch. These two keys enable instant, frictionless processing and delivery of financial products.

 

Speaking of how the UIDAI-led Aadhar project paved the way for India’s paperless finance ecosystem, Nilekani said that the coming together of e-KYC, e-sign, and digital locker would create the seamless and instant processing and delivery of financial products.

 

“Ultimately, Aadhar-led authentication would lead to the financial and social inclusion of people who had been outside the ambit of the formal financial system.

 

200 million Indians shopping online by 2020

 

Recently Amazon’s Agarwal agreed that online transaction needs to be frictionless, adding that customers must be allowed to access a product of their choosing instantly through instant payment and instant authentication through e-KYC.

 

Talking of the growth of e-commerce in India, Agarwal said that Amazon has made 90% of India’s pincodes serviceable. “E-commerce will eventually touch every person in India”, Agarwal said, adding that e-KYC would help enable frictionless online transacting that would encourage more people to shop online.

 

Paperless products can also reach consumers where brick and mortar BFSI establishments may not. There currently are approximately 50 million online shoppers in India in 2016. This number is expected to hit 200 million in 2020.

 

This rapid spurt in online customers certainly would also impact the online marketplace for financial products, with more people going online to search, compare and buy these product.

 

So what needs to change for fast-tracking paperless product and transforming BFSI?

 

The use of e-sign (an Aadhar-enabled digital signature to replace wet signatures) and e-KYC via OTP (instead of physically documenting KYC or collecting biometric KYC), and the automation of payments instead of paper ECS or NACH mandates.

 

What are the advantages of paperless finance products?

 

Paperless finance products can be processed instantly in minutes, as opposed to days in the offline world. Consumers on mobile devices are connected to online financial platforms that can simultaneously process potentially millions of applications at once, this saving massive overheads in paperwork and manpower. The reduction of costs can be as much as 2-3% for banking products and 20-30% for insurance products. Consumers ultimately stand to gain with such reduction in costs.

 

Online selling of paperless product also helps weed out frauds, fudged data, and faking of signatures, thanks to e-signing and e-KYC. Lastly, selling paperless financial products online can help end the scourge of mis-selling of financial product. Since consumers can control the levers of their product search, they can compare, short-list and buy products that properly match their requirements.

 

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