Home » Blogs » 20000 Loan on Aadhaar Card : Check Eligibility, and Steps to Apply
An Aadhaar card is primarily a unique identification number that serves as an identity and address proof. But, did you know that the same Aadhaar can also help you secure personal loans during cash crunches?
Yes, your Aadhaar is not just a relic of questionable photography skills but a golden ticket to getting a Rs. 20,000 personal loan.
Continue reading the blog to understand how the usefulness of your Aadhaar card far exceeds your photo’s sharpness.
Features of Using an Aadhaar Card for Rs. 20,000 Personal Loan
Aadhaar card loans come with several features such as:
Small Loan Amount
Aadhaar cards are not connected to CIBIL reports, making it difficult for banks to gauge your creditworthiness. As a result, financial institutions offer small and easily repayable loans.
Minimal Documentation
Aadhaar card loans require minimal documentation as the government ID acts as your identity, DOB (date of birth), and address proof. Some banks require a PAN card and additional KYC documents to approve the loans. But, the requirement varies.
Instant Approval
These loans are often approved and disbursed in a few minutes due to low documentation requirements and a smaller loan amount. So, Aadhaar card loans are perfect for situations where you urgently require money, such as a personal loan for a medical emergency.
No Collateral
The loans do not require collateral as the banks lend out small amounts. And, the no collateral feature makes personal loans more accessible to people without any significant assets to their name.
Flexible Repayment Options
The best part? Even though it is a Rs. 20,000 loan, the repayment term is the same as any other regular personal loan. In other words, your monthly EMIs are more manageable.
Steps to Apply for a ₹20,000 Loan on Aadhaar Card
Applying for a Rs. 20,000 loan using an Aadhaar card is as simple as, if not simpler than, applying for regular personal loans. However, the process is slightly different. Let’s see how to apply for an Aadhaar card loan.
Eligibility Criteria for 20,000 Loan on Aadhaar Card
First, check your eligibility for the personal loan. Now, different banks have different criteria. So, go through the documents and online requirements carefully.
For example, some banks may conduct additional credit checks through your PAN card. While other banks may ask for income proof like pay slips and P/L statements, amongst other documents.
But, generally, you need to fulfil the following criteria, you need:
- To be between the ages of 21 and 60
- To be an Indian citizen
- A valid Aadhaar card
- A stable income source
- A minimum salary requirement between Rs. 12,000 and Rs. 20,000
Again, these are the basic criteria, and the actual criteria may differ based on the loan provider.
Also Read: How to Get Rs. 2 lakh Personal Loan on Aadhaar Card?
Documents Required for 20,000 Loan on Aadhaar Card
Well, water is wet, and Aadhaar loans require a valid Aadhaar card.
However, banks may ask for additional documents to complete their KYC process. Here are all the documents you might require during the verification procedure.
For Salaried Individuals
| Identity proof | Driver’s License PAN Card Passport |
| Address proof | Electricity Bill Water Bill Passport |
| Income proof | Last six months’ bank statements Salary slips Form-16 |
| Work experience proof | Employment certificate with at least 1 year of experience |
For Self-Employed Individuals
| Identity proof | Driver’s License PAN Card Passport |
| Address proof | Electricity Bill Water Bill Passport |
| Income proof | Last six months’ bank statements ITR for the past 3 years Business registration certificate |
Banks and NBFCs with low-documentation policies do not require these documents and can complete the loan process only with an Aadhaar card. Moreover, a good credit score also reduces the number of documents you require to prove your credibility.
Note: Check with your loan officers before moving forward with your application.
Also, Read:Apply for a Rs. 50,000 loan on an Aadhaar Card
Interest Rates and Additional Charges on Aadhaar Card Loan
Compare interest rates and additional processing charges of different banks before finalising one. The goal is to find the most flexible loan with low interest rates and a long repayment period.
Usually, the interest rates start from as low as 9% per annum and can go beyond 20% per annum, depending on the financial institution’s regulations.
In addition, every bank charges a loan processing fee of 2.5% to 6% of the total amount, along with GST. Sometimes, they deduct the processing fee from the disbursed amount. So, consider this while applying for the loan amount.
Tip: Negotiate for a lower interest rate if you opt for the offline loan application route.
Repayment Plan for 20,000 Loan on Aadhaar Card
Present a solid repayment plan to your loan officers to build their confidence. The more confident they are about your repayment ability, the more likely they are to approve your application.
The repayment plan also helps you budget for your monthly EMIs. Consequently, it is easier to afford the instalments without drastically altering your lifestyle.
Now, let’s look at an example repayment plan:
| Loan Amount | Interest Rate (p.a.) | Tenure (months) | EMI (Rs.) | Total interest paid (Rs.) | Total principal amount repaid (Rs.) |
| ₹20,000 | 10% | 12 | 1,758 | 1,100 | 21,100 |
| 24 | 923 | 2,150 | 22,150 | ||
| 36 | 645 | 3,232 | 23,232 | ||
| 48 | 507 | 4,348 | 24,348 | ||
| 60 | 425 | 5,496 | 25,496 |
As you can see, there’s a trade-off. For lower EMIs, you need a longer repayment period and end up paying more interest. On the other hand, the EMIs are higher when you want to reduce the total interest paid to the bank.
Therefore, choose the option that is most suitable to your current financial condition.
Also Read: How To Apply For ₹5000 Loan On Aadhaar Card?
How to Apply for Rs. 20,000 Personal Loan on Aadhaar Loan?
After everything is ready, it is quite easy to apply for an online Aadhaar card loan:
- Shortlist your loan providers
- Compare their interest rates and finalise one
- Check their eligibility criteria
- Fill out the online application
- Upload your Aadhaar number
- Upload other documents
- Enter the loan amount and repayment period
- Verify the details
- Click on submit
For Offline Method:
- Visit your nearest bank or NBFC branch
- Discuss the eligibility criteria with your loan officer
- Negotiate for a lower interest rate
- Fill out the application
- Provide attested copies of your Aadhaar card and other documents
- Authenticate your Aadhaar ID through biometrics or a QR code
Loan Disbursal
After the verification, the loan amount is disbursed within 24 hours if everything’s in order.
How to Avoid Rejections of Aadhaar Card Loans?
Even though it’s unlikely, some banks and NBFCs might reject your loan application. So, here are 4 things that you can do to avoid unnecessary rejections.
Maintain your CIBIL
Keep your credit score above 650 to ensure faster approval of your loans. Paying all EMIs without delays and timely repayment of other loans helps increase your credit score.
Close Existing Loans
Banks prioritise individuals with little to no existing debts as it decreases their risk exposure. Furthermore, closing your existing loans lowers your debt-to-income ratio which is another green flag for your lenders.
Avoid Multiple Loan Applications
Loan application inquiries are also recorded in your CIBIL report. Applying for multiple loans can raise concerns and lower your credit score. So, it’s best to apply for a single Aadhaar card loan.
Double-Check your Information
Always re-verify your personal information, ID numbers, spelling, and financial figures before applying. Getting your application rejected due to silly mistakes is the last thing you want.
Conclusion
While the loan process is stress-free and quick, the initial steps are time-consuming. For one, you can get overwhelmed by the sheer number of Aadhaar card loans available in the market. This is where Credmudra comes in.
Credmudra is an online loan aggregator platform that does the research and comparison for you. And, after a thorough analysis of your profile, it connects you with suitable lenders that offer flexible terms. In addition, you get:
- Self-serve knowledge base to understand various financial terms in your application process
- Pre-underwriting services if you have no credit history
In other words, Credmudra does all the heavy lifting for you while you sit back and submit your loan application documents.
Sign up for free and explore the various Aadhaar loans available on the platform.
Also Read: How To Get A Personal Loan On Aadhaar Card?
FAQs
1. How to Check Aadhaar Card Loan Eligibility?
Banks offer loan documents where they mention the eligibility criteria for Aadhaar loans. Check with your loan providers before moving ahead with your loan application.
2. Do I need a PAN Card to Apply for an Aadhaar Card Loan?
While not necessary, some lenders may ask for a PAN card to check your credit score and complete the KYC process.
3. What is the Interest Rate on an Aadhaar Card Loan of Rs 20,000?
The interest rate for an Aadhaar card loan varies from 9% to over 20%, depending on the bank.
4. Can I Get an Aadhaar Card Loan without a Salary Slip?
Yes, you can get an Aadhaar card loan without a salary slip. However, you need to mandatorily produce bank statements for the past 6 months to show your financial stability.
5. Will I need a Co-Applicant for an Aadhaar Card Loan?
No, it is mandatory to get a co-applicant or guarantor for an Aadhaar card loan. However, getting one increases your chances of securing a loan.
Also, Read:How To Get A 10000 Loan On Aadhaar Card?
