Personal loans: Many lenders offer quick cash with minimal paperwork, but here is why you should be cautious

If you are looking for money to borrow but do not have the patience to go through the long process of arranging a range of documents, then you can seek a loan from lenders who are willing to do so in a short span of time without elaborate documentation.

From banks and NBFCs to fintech apps, different categories of lenders can be explored to raise quick cash. However, some factors should be considered before taking a personal loan from such lenders.

Applying for a loan: Key factors to be considered

1. Credibility and reviews: You need to make sure the lender is credible and trustworthy. You can check the reviews left by previous customers online to get an idea about a lender’s credibility.

2. Aligning needs with offerings: Another factor that matters is whether the offering aligns with your requirements. For instance, if you need to raise a large sum and the lender primarily caters to small borrowers, then perhaps you need to look for another lender.

Similarly, when a lender is known for giving business loans and you are looking for a personal loan, you could also be better suited to seek an alternative lender.

3. Interest rate: Another key factor to consider is the rate of interest at which the lender offers a loan to you. If the interest rate is too high, then you can look for another lender.

Documents required for a loan

These are some of the documents required for raising a personal loan:

a) Three months’ salary slips

b) Employment letter/ ID card

c) Three months of bank statements

d) Past two or three years’ ITR

Loan without documents

Notably, there is a way to apply for a loan without an elaborate set of documents. This can be made possible by using eKYC.

For the unversed, eKYC is a digital process that enables lenders to verify a customer’s identity and address using biometric authentication. It leverages technologies such as Aadhaar to authenticate personal loan applicants in real-time. To start the process, you need to enter your mobile number linked to Aadhaar.

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